Columbia 


ELEMENTS  OF  ACCOUNTING 

Business  23-24. 


NEW   YORK 
1916 


PROBLEMS  AND  PRACTICE  DATA 

FOR 

ELEMENTS  OF  ACCOUNTING 


BY 

R.  B.  KESTER 


NEW   YORK 
1916 


COPYRIGHT,   1916,  BY  R.   B.  KESTER 


UNIVERSITY  PRINTING  OFFICE 
COLUMBIA  UNIVERSITY 


II 

PROBLEMS 

1.  On  June  30,  1915,  H.  S.  Homer  has  the  following  property:  Cash  $1675.29; 
Mdse.  $15,683.71;  Furniture  and  Fixtures  $1275.-;  Delivery  Equipment  $836.-; 
Stocks  and  Bonds  bo't  for  investment  at  $5360.-;  accounts  owing  him,  Jno.  Peter- 
son $69.50;  Pete  Hewitt  $125.-;  Chas.  Jackson  $742.69;  Earl  Jones  $147.31;  J.  T. 
Squires  $790.42;  I.  M.  Axman  $63.74;  and  S.  P.  Palmer  $75.-.    He  owes  James 
Bros.  $1250.69,  T.  J.  Stewart  &  Co.  $965.-,  T.  Jennings  Jinks  $4692.43  for  mdse. 
purchased;  and  his  60  da.  note  for  $1000.-  discounted  at  the  bank  at  6%  is  due 
tomorrow.    What  is  his  present  interest  in  the  business? 

2.  During  the  following  6  months  he  bo't  goods  amounting  to  $20,000.-  paying 
$14,769.25  cash,  the  balance  outstanding  on  Dec.  31.     He  paid  on  account  James 
Bros.  $1000.-,  T.  J.  Stewart  &  Co.  $469.31,  T.  Jennings  Jinks  $4500.-;  for  ex- 
penses of  clerk  hire  $1500.-,  rent  $750.-,  including  heat,  light,  and  water  service, 
advertising  $60.-,  delivery  equipment  for  repairs  $75.-,  deliverymen  $600.-,  sup- 
plies $150.-  and  general  expense  $250.-.    He  received  on  old  accounts  from  Jno. 
Peterson  $50.-,  Pete  Hewitt  $125.-,  Chas.  Jackson  $143.72,  Earl  Jones  $147.31; 
J.  T.  Squires  $600.-,  I.  M.  Axman  $13.74,  and  he  is  notified  that  S.  P.  Palmer  has 
gone  into  bankruptcy  and  that  he  will  pay  33  M%  of  all  claims.    Cash  sales  have 
been  $10,763.25  and  sales  on  account  to  new  customers  $25,637.52  of  which 
amount  $8,769.41  is  now  outstanding.    Goods  now  on  hand  are  valued  at  $12,- 
673.49.     He  received  in  dividends  and  interest  from  his  investments  $268.-. 
Reckoning  wear  and  tear  on  furniture  &  fixtures  at  10%  per  annum  and  on  delivery 
equipment  at  12H%,  what  is  his  business  worth  on  Dec.  31,  1915? 

3.  A  railway  company  has  the  following  assets:  Cash  $32,500.-,  Office  furniture 
$975.-,  franchise  $300,000.-,  U.  S.  bonds  6%  $30,000.-,  Interest  accrued  on  U.  S. 
bonds  $900.-,  Power  House  $200,000.-,  Construction  $502,625.-,  Motors  &  Cars 
$275,000.-,  Car  barns  $18,000.-.     Its  liabilities  are  Notes  Payable  $35,000.-, 
Accounts  Payable  $12,500.-,   First  mortgage  bonds  $200,000.-,    Interest  due  on 
same  $5,000.-,  Second  mortgage  bonds  $250,000.-,  Interest  due  on  same  $7500.-. 
What  is  the  net  worth  of  the  company? 


3  1 


36247i 


Ill 

PROBLEMS 

1.  Make  up  three  problems,  using  your  own  data,  to  illustrate  the  three  types 
of  business  organization. 

2.  The  following  shows  the  financial  condition  of  Jas.  Shongood  on  Dec.  31:  He 
owns  a  building  costing  $5000.-  on  land  costing  $1000.-  in  part  payment  for 
which  he  gave  his  note  secured  by  mortgage  for  $3000.-.    He  has  machinery  valued 
at  $900.-,  loose  tools  at  $150.-,  finished  goods  on  hand  $2500.-,  raw  material  and 
partly  finished  goods  $8325.-,  models  and  patterns  $350.-,  shop  furniture  $275.-, 
typewriter,  safe,  office  desk,  filing  cabinet,  chairs,  etc.,  in  all  $150.-.    His  bank 
balance  is  $525.-,  cash  in  safe  $75.-,  amounts  due  him  from  customers  on  open 
account  $3967.50,  on  notes  $572.25.    He  owes  creditors  on  open  account  $2572.75, 
on  accepted  drafts  $543.50,  payroll  earned  but  not  due  $150.-.    Due  to  expansion 
of  his  market  he  needs  more  capital  to  take  advantage  of  new  opportunities. 
Accordingly  he  takes  in  a  partner,  Homer  Goodwell,  who  invests  cash  equal  to 
Shongood 's  interest  in  the  business,  $9000.-  of  which  is  used  to  purchase  the  plant 
of  a  competitor  ($1500.-  for  the  ground  and  $1600.-  for  the  machinery,  $250.-  for 
tools,  $100.-  for  patterns,  $500.-  for  shop  furniture,  and  the  balance  for  the  build- 
ing), $5000.-  to  pay  for  product  on  hand  which  was  taken  over  ($2000.-  for  fin- 
ished goods),  and  $2000.-  for  delivery  equipment.     Show  a  financial  statement 
for  Shongood  and  one  for  Shongood  and  Goodwell. 


[4 


IV 
PROBLEMS 

1.  After  operating  for  two  years  during  which  time  their  interests  are  kept  equal 
Shongood  and  Good  well  realize  that,  if  they  are  to  meet  competition  on  a  satis- 
factory basis,  they  must  secure  large  scale  production.  Therefore  a  company  is 
formed  with  $75,000.-  capital  stock  which  takes  over  the  fixed  assets  of  the 
partnership  at  the  values  shown  above,  after  allowing  for  depreciation  at  the  rate 
per  year  of  3%  on  buildings;  6^%  on  machinery;  12%  on  office  and  10%  on  shop 
furniture;  20%  on  models  and  patterns;  10%  on  delivery  equipment.  Small  tools 
had  been  maintained  at  an  even  value  for  the  two  years.  Assuming  that  no  cash 
was  turned  over  by  the  partnership  and  that  all  other  assets  and  liabilities  have 
the  same  values  as  shown  in  problem  No.  Ill,  2,  draw  up  a  financial  statement  of 
the  company,  using  the  additional  information  that  $40,000.-  worth  of  their 
capital  stock  was  sold  at  105  and  that  balance  is  accounted  for  by  the  purchase  of 
the  good  will  of  the  partnership  and  the  partnership  assets  above  mentioned. 


2.  A  company  is  capitalized  at  $25,000.-.  It  has  outstanding  obligations  on 
open  account  of  $5621.75  and  on  its  notes  of  $8341.37.  It  owns  property  as  fol- 
lows: Mdse.  $5339.40;  Cash  $3100.45;  Notes  Receivable  $2500.-;  First  Nat'l 
Bank  Stock  $2000.-;  Machinery  and  Tools  $10,000.-;  Furniture  &  Fixtures 
$590.-;  Real  Estate  $15,900.-;  Horse  and  Wagon  $500.-;  Accounts  Receivable 
$11,592.76.  It  is  estimated  that  Machinery  and  Tools  have  depreciated  12J^%, 
Furniture  10%,  Real  Estate  4%,  and  Horse  and  Wagon  12  H%,  and  that  2%  of 
the  outstanding  accounts  cannot  be  collected.  Accrued  payroll  amounts  to  $500.- 
and  taxes  $250.  Interest  earned  but  not  due  amounts  to  $175.-.  Make  a  financial 
statement  of  the  company. 


(51 


V 
PROBLEMS 

1.  A.  Rowe  at  the  beginning  of  1912  had  the  following  assets:  Real  Estate 
$2500.-;    Furniture    &    Fixtures    $400.-;    Cash    $1550.-;    Accounts    Receivable 
$3290.-;  Merchandise  $5710.-;  and  unexpired  insurance  for  one  year  $50.-.    His 
liabilities  were:  Mortgage  on  Real  Estate  $500.-;  Accounts  Payable  $3000.-. 
At  the  end  of  1912  he  has  assets  and  liabilities  as  follows:  Cash  $1000.-;  Accounts 
Receivable  $4390.-;  Notes  Receivable  $525.-;  School  District  Bonds  $1000.-; 
Furniture  &  Fixtures  $360.-;  Real  Estate  $2425.-;  Mdse.  $6000.-;  Accrued  expense 
items  $125.-;   Notes  Payable  $250.-;  Accounts  Payable  $3300.-.     Determine 
Rowe's  profit  or  loss. 

2.  Make  an  analytical  statement  to  show  the  effect  on  the  business — i.  e.,  the 
changes — of  such  profit  or  loss. 

3.  Can  you  tell  how  the  change  in  proprietorship  came  about? 


6  ] 


VI 
PROBLEMS 

1.  From  the  following  data  show  the  cause  of  Rowe's  changed  proprietorship: 
Depreciation  on  real  estate  $75.-;  on  furniture  $40.-;  Interest  paid  on  mortgage 
$35.-;  Rent  and  wages  now  due  amounting  to  $125.-  as  indicated  above,  purchases 
for  the  year  $19,790;  sales  $25,000.-;  other  expenses,  including  insurance  $3200.-. 

2.  Assuming  that,  instead  of  as  stated  in  No.  V,  1,  the  unexpired  insurance  was 
for  6  months  at  which  time  a  new  two-year  policy  was  purchased  for  $225.-;  that 
at  the  end  of  1912  there  was  accrued  interest  on  notes  receivable  of  $15.-,  on  school 
bonds,  of  9  months  at  5%,  and  on  notes  payable  $10.-,  draw  up  a  financial  state- 
ment as  at  the  end  of  1912  and  determine  Rowe's  profit  for  the  year.    Assume  that 
the  above  items  are  in  addition  to  those  given  in  No.  V,  1,  and  do  not  change  the 
particular  values  there  shown. 

3.  Rowe's  profit  under  the  conditions  of  No.  2  above  is  $2236.25.    Can  you  make 
a  profit  and  loss  summary  accounting  for  it? 


[7  ] 


VII 
PROBLEMS 

1.  As  proprietor  of  a  business,  you  started  the  year  with  $20,000.-  worth  of 
mdse.,  you  bo't  $100,000.-  more  during  the  year,  and  have  on  hand  at  the  end 
$25,000.-.    If  your  gross  profit  on  sales  was  $40,000.-,  what  was  the  amount  of 
your  sales?    Selling  expenses  were  $15,000.-  and  general  and  administrative  ex- 
penses were  $10,000.-.    Draw  up  a  pro  forma  Profit  and  Loss  statement. 

2.  Alex.  Tuttle,  your  branch  representative  at  Duluth,  reported  to  you  his 
year's  sales  as  $92,350.-,  his  purchases  $75,790.-,  gross  profit  of  $12,630.-. 
Referring  to  previous  records  you  find  he  had  on  hand  at  the  beginning  of  the  year 
$21,070.-  worth  of  goods  and  that  the  average  cost  of  sales  for  the  past  five  years 
has  been  78.4%  of  the  sales.    What  conclusion  would  you  draw  therefrom? 


[8] 


VIII 
PROBLEMS 

1.  On  Nov.  26,  your  stock  of  goods  is  destroyed  by  fire  but  your  records  are 
saved.    They  show  that  you  started  the  year  with  $14,575.20  worth  of  goods 
that  you  purchased  during  the  year  $73,974.75  worth,  and  your  sales  up  to  the 
time  of  the  fire  amounted  to  $97,534.69.    Records  for  the  past  ten  years  showed 
an  average  gross  profit  on  sales  of  41.68%.    What,  approximately,  was  the  value 
of  the  goods  destroyed?    Make  a  statement  to  show  your  claim. 

2.  From  the  following  data  concerning  the  Rawnser  Goods  Co.,  prepare  pro 
forma  Financial  and  Profit  and  Loss  Statements:  Goods  on  hand  from  previous 
year,  $12,000.-;  Purchases,  $70,000.-;  Sales  $84,000.-;  General  Expenses  $2000.-; 
Salesmen's  Salaries  $6400.-;  Cash  on  hand  $20.-;  Cash  in  bank  $2130.-;  Manager's 
Salary  $1250.-;  Rent  $900.-;  Freight-in  $250.-;  Returned  Sales  $750.-;  Returned 
Purchases  $400.-;  Business  Plant  $11,000.-;  Accounts  Receivable  $8000.-;  Notes 
Receivable  $2000.-;  Accounts  Payable  $6100.-;  Notes  Payable  $850.-;  Interest 
received  on  deposits  $100.-;  Office  Furniture  cost  $600.-;  Repairs  to  Business 
Plant  $50.-;  Advertising  $1500.-;  Gain  carried  forward  from  last  year  $2400.-; 
Goods  on  hand  now  $14,600-;  Advertising  prepaid  $50.-;  Office  salaries  now  due 
but  unpaid  $200.-;  Rent  unpaid  $100.-.  Allow  4%  for  depreciation  on  Business 
Plant,  10%  on  Office  Furniture,  and  5%  for  estimated  bad  debts.    Their  Capital 
Stock  is  $25,000.-. 


9l 


IX 
PROBLEMS 

1.  Draw  up  from  your  own  data  a  financial  statement  for  a  partnership.     (At 
least  10  assets  and  4  liabilities.) 

2.  Making  your  own  assumptions,  set  up  a  financial  statement  for  the  succeed- 
ing year  and  a  comparative  statement  for  the  two  years.    (Same  as  in  No.  1  above. ) 


10] 


PROBLEMS 

1.  Draw  up  a  Profit  and  Loss  statement  to  account  for  the  change  in  proprietor- 
ship shown  by  No.  IX,  2,  making  your  own  assumptions  as  to  items  for  the  various 
sections  of  the  statement. 

2.  State  the  probable  business  transactions  occurring  to  bring  about  these 
changes  in  proprietorship — i.e.,  show  the  interaction  of  the  profit  and  loss  ele- 
ments with  the  asset  and  liability  elements  in  causing  the  changes  in  financial 
condition. 


II  1 


XI 
PROBLEM 

1.     Using  the  schedule  shown,  write  out  at  least  three  examples  of  each  class  and 
show  their  effects  in  each  of  the  three  opposite  classes.    (27  examples.) 


[    12   1 


XII 
PROBLEMS 

1.  On  Aug.  1,  A.  B.  Carnahan,  a  customer,  owed  us  $135.30;  Aug.  3,  he  paid  $75.- 
on  account;  Aug.  10,  he  purchased  goods  amounting  to  $45.20;  Aug.  12,  he  re- 
turned $10.-  worth  of  goods  as  unsatisfactory;  Aug.  20,  he  paid  $31.68  in  full 
settlement  of  his  purchase  of  the  10th,  being  allowed  a  10%  discount  for  prompt 
payment;  Aug.  25,  he  purchased  a  bill  of  goods  amounting  to  $87.50.    Set  up 
Carnahan's  account  as  it  would  appear  in  our  ledger. 

2.  On  March  5,  we  gave  our  note  in  settlement  of  account  with  D.  E.  Faraday 
&  Co.,  the  balance  to  date  being  $375.-;   March   10,  we  purchased     goods 
to  $750.-;  March  15,  we  returned  $50.-  worth  of  goods  as  not  being  what  was 
ordered  and  put  in  a  claim  for  $25.-  on  account  of  some  goods  not  being  of  first 
class  quality;  March  24,  we  paid  $300.-  on  account;  and  on  March  29,  we  pur- 
chased goods  for  $550.-.    Set  up  Faraday  &  Co.'s  account  as  it  would  appear  on 
our  ledger. 

3.  a.    Using    the    data   of   No.    1,    set  up  our  account  on  Carnahan's  ledger, 
b.  Using  the  data  of  No.  2,  set  up  our  account  on  Faraday  &  Co.'s  ledger. 

4.  Set  up  a  Cash  account  for  the  following:  Received  cash  from  a  note  discounted 
at  the  bank  $990.-;  paid  out  $25.-  for  stamps,  $125.-  for  delivery  wagon,  $250.-  for 
a  horse,  and  $50.-  for  harness;  received  from  sales  $500.-,  from  customers  on 
account  $785.50;  paid  creditors  $1000.-;  clerks  $250.-;  rent  $300.-. 

5.  Set  up  a  Notes  Receivable  account  for  the  following:  April  2,  received  A.  B. 
Clay's  note  for  $500.-;  April  10,  received  note  from  J.  B.  Gaynes  for  $250.-; 
April  12,  transferred  Clay's  note  in  settlement  of  our  account  with  Jacks  &  Co.; 
April  15,  received  R.  B.  Dobbs'  note  for  $375.-;  April  21,  discounted  Dobbs'  note 
at  the  bank;  April  30,  received  payment  of  Gaynes'  note. 

6.  We  purchased  machinery  for  $1,500,  f.  o.  b.  factory;  the  freight  and  drayage 
amounted  to  $150;  the  cost  of  installation  and  attachments  was  $250.     After 
using  same  for  six  months,  one  machine  costing  complete  $225  was  sold  for  $200. 
Show  the  above  items  in  the  Machinery  account. 

7.  A  piece  of  real  estate  was  bought  for  $50,000.     Investigation  of  title  costs 
amounted  to  $1,000;  side  walks,  curbing,  and  street  paving  to  $585.50.     The 
land  was  later  sold  for  $75,000.     Set  up  the  Land  account  covering  the  above. 


XIII 
PROBLEMS 

1.  Set  up  all  the  accounts,  both  debit  and  credit,  for  the  following  transactions. 
List  all  expense  items  under  a  general  title,  Selling  Expense.     Be  careful  to  main- 
tain the  debit  and  credit  equilibrium.      Paid  salesmen's  salaries  $475;  delivery 
expense   $75;    boxes    for  shipping  $15;  premiums  $42.65;  salesmen's   commis- 
sions $50;  credit  rating  service  $10;  salesmen's  traveling  expenses  $230.45;  adver- 
tising $125;  out  freight  $15.32;  insurance  on  stock  $22.50;  packing  supplies,  paper, 
etc.,  $73.40;  shipping  clerks' wages  $50;  sales  show  room  rental  $75;  received 
premium  at  fair  on  exhibit  $25;  sold  small  parcel  of  packing  supplies  $2.50. 

2.  Prepare  as  in  No.  1  above  ledger  accounts  for  the  following  for  the  year  1913: 
12-1,  paid  office  supplies  $35;  12-3,  travelling  expenses  $20;  12-10,  legal  services 
$50;  12-11,  special  stenographic  work  $5;  12-15,  telegrams  $2.50;  12-20,  collection 
agency  fee  $10;  burglar  insurance  on  safe  $5;  12-24,  charities  $15;  12-29,  received 
rent  portion  of  office  $10  and  use  of  phone  $2;  12-31,  paid  office  help  $75;  mana- 
ger's salary  $125;  telephone  $8.32;  lights  $2.50. 

3.  Enter  the  following  data  in  one  Gen'l  Expense  account:     Paid  rent  $75; 
office  supplies  $15;  repairs  on  delivery  auto  $20;  telegrams  $2.05;  insurance  $50; 
office  help  $40;  printing  and  advertising  $60;  electric  sign  $25;  discount  on  money 
borrowed  at  bank  $3;  received  interest  on  loan  $5.60;  paid  window  lettering  $3; 
coal  $28 ;  telephone  $3.05 ;  traveling  expenses  of  salesman  $75,  and  of  manager  $10 ; 
salesman's  salary  $150;  gasoline  for  auto  $15;  wrapping  paper  and  twine  $10; 
postage  $12;  bags  and  cartons  $7.50;  street  car  tickets  $5;  and  typewriter  repairs 
$2.50. 

4.  From  the  data  in  No.  3,  prepare  accounts  with:     Delivery  Expense;  Adver- 
tising; Gen'l  Selling  Expense;  Office  Supplies;  Gen'l  Office  Expense. 

5.  Proprietor  invests  $10,000;  he  withdraws  $2000;  pays  a  business  debt  of  $500 
out  of  his  private  funds;  he  turns  into  the  business  a  piece  of  real  estate  valued 
at   $5000;  he  pays   his   personal  note  out  of  business  funds  $500;  his  personal 
account  credit  balance  of  $1500  is  transferred  to  his  capital  account.      Prepare 
proprietor's  capital  account,  treating  all  of  the  above  items  therein. 

6.  Proprietor  paid  personal  coal  bill  $30  from  funds  of  business;  withdrew  cash 
salary  $25;  collected  miscellaneous  small  accounts  $22.40  and  retained  money  for 
private  use;  paid  house  milk  bill  in  trade  $6.20;  had  his  account  credited  with  two 
weeks'  salary  $50.     Prepare  proprietor's  personal  account. 


[  14] 


XIV 
PROBLEMS 

1.  Sales  for  the  year  were  $50,000,  returns  $2,500,  inventory  at  beginning  $8,000, 
purchases  $40,000,  returns  $4,000,  sales  rebates  and  allowances  $250;  purchases 
rebates  and  allowances  $325;  freight  and  drayage-in  $560.  Show  the  above 
properly  entered  on  the  ledger  in  the  various  merchandise  accounts. 

Merchandise. 


Inventory 

4,000.-  |  Sales 

10,000.- 

Purchases 

2,500.- 

Discount 

300.- 

Discount 

120.- 

Returns 

200.- 

Freight 

300.- 

Sales 

1,275.- 

Returns 

450.- 

Sales 

3,750.- 

Purchases 

6,250.- 

Rebate 

50.- 

Duty 

250.-    Discount 

420.- 

Allowances 

365.- 

Sales 

8,960.- 

Discount 

75.- 

Allowances 

75.- 

Purchases 

10,790.- 

Discount 

163.- 

Returns 

420.- 

Sales 

9,475. 

Drayage 

175.- 

Rebate 

15.- 

Rebate 

69.- 

Returns 

590. 

Show  these  items  properly  on  the  ledger. 

3.  Furniture  and  Fixture  account  shows  a  cost  of  $2,500,  sales  at  cost  of  $250. 
At  end  of  fiscal  period  depreciation  estimate  is  12H%-     Show  the  data  on  the 
ledger,  setting  up  both  the  debits  and  the  credits. 

4.  Loose  Tools  show  cost  of  $375  and  inventory  shows  $300  on  hand.     Show  the 
data  on  the  ledger. 

5.  Machinery  shows  cost  of  $10,000,  additions  and  betterments  of  $2,000,  sales 
at  cost  price  of  $1,500  during  the  first  year,  and  loss  by  explosion  of  $3,000  during 
the  second  year.     Depreciation  is  estimated  at  10%  on  a  reducing  basis.     Show 
the  accounts  at  the  end  of  the  third  fiscal  period. 


[153 


XV 

PROBLEMS 

1.  Set  up  the  ledger  account  called  for  in  XIII,  3,  and  show  the  account  closed 
and  the  new  accounts  called  for  in  XIII,  4,  properly  set  up.     (Be  sure  to  make 
cross  reference  to  pages  and  show  the  transfers  between  the  several  accounts.) 

2.  Under  date  of  Dec.  31,  1912  set  up  the  following  accounts  on  the  ledger,  in 
proper  form  and  under  correct  titles,  and  take  a  trial  balance.     T.  C.  Counts, 
investment  $11,635,  withdrawals  $900;  Purchases  $12,300;  Sales  $11,850;  Cash 
$1,040;  Furniture  $2,100;  Notes  Receivable  $1,300;  Notes  Payable,  Dr.  $590, 
Cr.  $2,400;  Accounts  Receivable  $3,210;  Horses  and  Wagons  $1,940;  Freight  and 
Drayage  $128;    Insurance  and  Taxes   $205;  Interest  and  Discount  Dr.  $42; 
Expenses  $850;  Wages  $1,280. 

Prepare  Financial  and  Profit  and  Loss  statements  using  these  inventories  and 
appraisals:  Merchandise  $7,500;  Furniture  $2,000;  Horses  and  Wagons  $1,700; 
Insurance  unexpired  $45;  and  Expense  Supplies  $170. 


[  16 


XVI 
PROBLEMS 

1.  Give  several  examples  of  deferred  expense  and  income  and  accrued  expense 
and  income.     Show  these  set  up  in  account  form. 

2.  Assuming  an  inventory  of  $2,500  for  problem  XIV,  2,  as  correctly  set  up, 
show  the  accounts  closed. 

3.  Close  the  ledger  for  problem  XV,  2. 


17] 


XVII 
PRACTICE   DATA 

The  following  transactions  are  to  be  set  up,  debit  and  credit,  on  the  ledger: 
Use  the  transaction  number  as  the  day  of  the  current  month.  Set  up  on  your 
ledger  the  following  account  titles,  in  the  order  given,  allotting  to  each  the  number 
of  lines  indicated  by  the  numeral  following  the  title: 

Cash    35     Green  Cooper  Company     10 

Notes  Receivable 10     James  Black 10 

Tom  J.  Dukes   10     U.  R.  Marchand,  Capital  10 

M.  J.  Scooner 10     U.  R.  Marchand,  Personal     10 

M.  J.  Smith    10     Profit  and  Loss 15 

J.  T.  More    10     Purchases    15 

M.  I.  Quinn    10     Freight-In  10 

John  Cohen    10     Purchases  Returns  and  Allowances  . .  10 

Stan  Edwards   10     Sales 25 

Dan  O'Shea    10     Sales  Returns  and  Allowances 10 

Merchandise  Inventory    10     Salaries    10 

Furniture  and  Fixtures 10     General  Expense      15 

Notes  Payable 10     Expense  Supplies 10 

Johnson  Brown  &  Co 10     Interest  and  Discount     10 

Jackson  &  Little   10     Purchases  Discount     10 

1.  U.  R.  Marchand  invested  cash  $1,500  and  merchandise  $1,700. 

2.  Paid  rent  $30;  bought  merchandise  of  Johnson  Brown  Company  $1,340  on 
account. 

3.  Sold  mdse  for  cash  $340.25 ;  paid  for  office  stationery,  postage,  account  books, 
and  miscellaneous  supplies  $45.75. 

4.  Sold  mdse  $375.20  to  Tom  J.  Dukes,  receiving  $250  cash. 

5.  Bought  office  safe  and  typewriter  $85. 

6.  Bought  mdse  of  Jackson  &  Little,  $327.40,  paying  $200  cash.     Gave  Johnson 
Brown  &  Co.  $1,000  on  account.     Took  mdse  for  your  own  use  $25.60. 

8.  Cash  sales  were  $234.69.     Paid  for  advertising  $10. 

9.  Paid  clerk  $12,  fuel  bill  $22.50. 

10.  Bought  mdse  for  cash  at  receiver's  sale  $325. 

11.  Sold  Dan  J.  O'Shea  mdse  $35.     Took  his  check  in  payment. 

12.  Paid  $5  for  sales  tickets;  postage  $2.50;  envelopes  $1. 

13.  Sold  bill  of  mdse  $175.40  to  M.  J.  Scooner,  receiving  cash  $75.40,  P.  D. 
Jacks'  note  for  $35,  due  in  10  days,  and  Scooner's  note  at  30  days  for  the 
balance. 

15.  Gave  Johnson  Brown  &  Co.  your  10-day  note  for  balance  due.  Scooner 
returned  $10  worth  of  the  mdse  sold  him  on  the  13th,  claiming  it  inferior 
in  quality. 


XVIII 
PRACTICE   DATA 

16.  Cash  sales  were  $395.40.     Paid  clerk  $12. 

17.  Paid  freight  and  drayage  bills  $22.30;  light  bill  $5. 

18.  Drew  for  private  use  $25. 

19.  Bought,  on  account,  2-10,  n-30  mdse  from  Green-Cooper  Company  $2,500. 

20.  Cash  sales  $425.67. 

22.  Sales  on  account:     M.  J.  Smith  $30;  J.  T.  More  $51.20;  M.  I.  Quinn  $10.03; 
John  Cohen  $43.30;  Stan  Edwards  $69.30. 

23.  Returned  mdse  $200  to  Green-Cooper  Company  as  not  being  wh,at  was 
ordered. 

24.  Paid  clerk  $12;  received  payment  on  P.  D.  Jacks'  note  and  interest  25c. 
Was  allowed  by  Green-Cooper  Co.,  $10.-  on  damage  claim. 

25.  Paid  note,  favor  Johnson  Brown  &  Co.  with  interest  at  8%.     T.  J.  Dukes 
pays  $75  on  account.     Paid  freight  and  drayage  $25.04. 

26.  Took  mdse  for  own  use  $25.30;  sold  Dan  J.  O'Shea  mdse  $125  receiving  cash 
$40  and  Jake  Gibson's  6%,  60-day  note  for  $75. 

27.  Paid  'phone  bill  $2;  advertising  $8;  and  bill  heads  $5. 

29.  Allowed  D.  J.  O'Shea  $5  claim  for  goods  soiled.     Had  your  note  for  $1,200 
discounted  at  bank,  60  days  at  8%.     Paid  Green-Cooper  Co.  amount  due 
them. 

30.  Cash  sales  $235;  paid  clerk  $12;  fuel  $22.50;  drew  for  private  use  $25; 
collections  were:     M.  J.  Smith  $20;  J.  T.  More  $21.20;  John  Cohen  $5; 
Stan  Edwards  $25. 

31.  Paid  Jackson  &  Little  $100  on  account;  cash  sales  $500;  received  for  the 
store  farm  produce  $33.50  from  Jas.  Black,  allowing  him  mdse  $22  and  bal- 
ance credited. 

Note. — Be  sure  the  date — year,  month,  and  day — is  entered. 
Assume  addresses  for  all  personal  accounts. 


XIX 
PRACTICE   DATA 

Take  a  trial  balance  of  U.  R.  Marchand's  ledger,  recording  it  on  a  piece  of  journal 
paper. 

Marchand  finds  that  he  now  has  on  hand  goods  valued  at  $3,364.39  and  expense 
supplies  of  $21.40.  Close  the  ledger,  being  careful  to  take  account  of  the  pre- 
paid discount  on  the  $1,200  note  payable  and  the  interest  income  accrued  on 
Gibson's  note. 


2  o 


XX 
PRACTICE   DATA 

1.  Make  up  pro  forma  Financial  and  Profit  and  Loss  statements  for  Marchand 

2.  Compare  these  statements  with  the  post-closing  trial  balance  and  the  Profit 
and  Loss  Account  in  your  ledger. 

3.  Calculate  percentages  of  cost  of  sales,  gross  trading  profit,  selling  expenses, 
general  and  administrative  expenses,  net  profit. 


[   21 


XXI 
PROBLEMS 

1.  For  the  month  of  January,  the  following  purchases  were  made: 

1-1,  J.  N.  Muks  Wholesale  Hay  and  Grain  Co.:     10  T  alfalfa  in  the  bale  at 

$9.75;  50  T  timothy  and  clover  at  $10.50;  25  T  native  at  $12.25;  1,000  bu.  wheat 

at  93^  c.;  2,500  bu.  corn  at  75c.;  3,000  bu.  oats  at  42^  c.,  terms  1-10,  n-30. 

Hungarian  Flour  Mills:     5,000  sacks  white  flour  at  $1.40;  50  whole  wheat  at 

90c.;  75  yellow  corn  meal  at  55c.  terms  cash. 

Rocky  Mountain  Fuel  Co.:     1  car  hard  lump  32.51  T  at  $12.25;  1  car  lignite, 

mine  run,  25.  5  T  at  $2.30;  1  car  Canon  nut  31.72  T  at  $4.50,  terms  2-10,  n-30. 

1-5,  Howry  Grain  Co.;  5,250  bu.  wheat  at  95c.;  2,250  bu.  corn  at  67lAc.;  1,500 

bu.  oats  at  45c.;  terms  2-5,  n-30. 

1-10,  Central  Coal  and  Coke  Co.:     2  cars  bituminous  lump  34.8  T  at  $3.75; 

1  car  hard  nut  29.16  T  at  $10.50,  terms  net  30. 

1-17,  Farmers'  Co-operative  Elevators:     2,500  bu.  oats  at  39%c.;  1,500  bu.  corn 

at  68MC.,  terms  cash. 

1-24,  John  Johnson:     200  T  alfalfa  at  $8.20;  150  T  native  at  $11.75.     Paid  by 

check. 

1-29,  J.  N.  Muks  Wholesale  Hay  and  Grain  Co.;  5,000  bu.  wheat  at  91%c.; 

2,125  bu.  corn  at  72 Me.,  terms  n-30. 

Make  original  entry  of  these  transactions. 

2.  Sales  for  the  month  of  January  were: 

1-2,  Jackson  &  Weaver:     5  T  timothy  at  $13.50;  10  T  Canon  nut  at  $6.-;  10  bu. 

oats  at  50c.,  terms  cash. 

T.  M.  Jeffery:     5  T  hard  lump  $15.50;  50  sacks  whole  wheat  flour  $1.10;  30 

cornmeal  at  70c.,  terms  n-10. 

1-9,  J.  Thompson  Grocery  Co.:     500  buckwheat  at  60c.;  750  graham  at  $1.00; 

1,000  white  $1.60;  100  bu.  corn  at  90c. 

Peter  McGuire:     10  bu.  wheat  at  $1.40;  25  bu.  corn  at  95c.;  15  bu.  screenings 

at  95c.;  8  T  bituminous  lump  at  $5.10. 

1-16  Jas.  T.  White:     2  T  alfalfa  $13.50;  3  T  native  at  $16.75;  10  T  timothy  at 

$12.50;  500  bu.  corn  at  91c.;  1,000  bu.  wheat  at  $1.35,  terms  net  cash. 

S.  V.  Sifers:     10  T  lignite,  mine  run  at  $4.25;  3  sacks  whole  wheat  at  $1.25. 

Received  cash  in  payment. 

1-23  Ole  Oleson:     10  T  timothy  at  $11.75;  15  T  hard  lump  coal  at  $15.35;  8 

sacks  graham  flour  at  $1.10;  5  sacks  white  $1.70,  received  cash. 

Ayres  Elevator  Co.:     10,000  bu.  wheat  at  99Kc.;  500  corn  at  81%c.,  terms 

1-5,  n-30. 

1-30,  J.  T.  Thompson  Grocery  Co.;     250  cornmeal  at  65c.;  275  graham  at  95c.; 

400  white  at  $1.55;  10  T  timothy  $12.25;  terms  2-10,  n-30. 

[22    } 


Jeffery:  10  T  hard  nut  at  $13.25;  5  white  flour  at  $1.75.  Received  cash. 
S.  V.  Sifers:  5  T  Canon  nut  at  $6.25;  10  whole  wheat  at  $1.30;  5  cornmeal  at  75c. 
Enter  the  above  in  your  sales  book. 

3.  Rule  up  a  Purchases  Book  with  distributive  heads  of  hay,  coal,  grain,  flour, 
and  enter  the  transactions  of  problem   No.  1,  using  totals  only. 

4.  Rule  up  a  Sales  Book  with  the  same  analysis  columns  as  in  No.  3,  and  enter 
the  sales  given  under  problem  No.  2,  using  totals  only. 


[23  ] 


XXII 
PROBLEMS 

1.  Enter  the  following  transactions  in  the  cash  book:     Ben  Salzer  invested  cash 
$5,000;  sold  mdse  for  cash  $75;  paid  cash  for  stamps  $5;  bought  mdse  for  cash 
$230;  loaned  C.  W.  Jenks  on  note  at  1%  a  month  for  15  days  $250;  James  Good- 
year is  admitted  as  a  one-third  interest  partner  by  paying  $1,800;  a  $20  counter- 
feit note  was  discovered  and  we  were  unable  to  trace  it;  paid  freight  bill  by  check 
$39.03;  paid  light  bill  $5;  bought  coal  $25;  cash  sales  were  $850;  bought  miscel- 
laneous supplies  for  office  $15;  paid  John  Smith  $50  on  account  and  Tom  Jones 
$175  in  full  of  account;  paid  store  rent  $90;  water  tax  $12;  received  on  account 
from  Dick  Roe  $125,  Jno.  Joe  $55,  Chuck  Adams  $32.50;  J.  Jack  Jordan  $65, 
and  from  C.  W.  Jenks  on  his  note  $250,  interest  $1.25;  paid  office  help  $12,  sales- 
man $17.50. 

2.  Balance  and  post  the  cash  book  in  No.  1  above,  taking  account  of  a  cash 
shortage  of  $3.42. 

3.  John  Short  makes  the  following  investment:     Cash  $1,500;  mdse    $2,500; 
furniture  and  fixtures  $500;  delivery  service  $325;  rent  paid  in  advance  $50; 
accounts  receivable  $1,250;  accounts  payable  $2,000.     Make  the  opening  journal 
entry. 

4.  Make  journal  entries  for  the  following  items:     We  remit  on  account  to  the 
N.  Y.  Mfg.  Co.  our  60-day  note  for  $235.67;  a  customer  writes  in  claiming  goods 
sold  him  are  unsatisfactory  and  we  allow  him  $15  if  he  will  keep  the  goods;  we 
receive  from  J.  W.  Baker  his  30-day  note  to  apply  on  account;  we  return  goods 
to  the  Rawnser  Goods  Co.  as  not  being  what  was  ordered — value  $50;  we  receive 
from  T.  C.  Jones,  a  customer,  to  apply  on  account,  R.  S.  Tomson's  note  for  $250. 

5.  Inventory  at  the  beginning  was  $3,962.50,  at  the  end  $3,450.75.     If  the  sales 
were  $6,847.69  and  there  was  a  loss  on  sales  of  $340.27,  make  the  journal  entries 
necessary  to  close. 


[24] 


XXIII 
PROBLEMS 

1.  A  trial  balance  taken  from  the  books  of  X.  Z.  Snyder  for  the  year  ending 
Dec.  31,  1911  contained  the  following  account  balances: 

X.  Z.  Snyder  Capital  $25,910.67;  X.  Z.  Snyder,  Personal  $2,045;  Mdse  $13,294.95 
Dr.;  Notes  Receivable  $597.40;  Accounts  Receivable  $6,730.30;  Accounts  Pay- 
able $8,146.45;  Notes  Payable  $2,900.75;  Land  $2,500;  Building  $5,000;  Fixtures 
$1,210;  Salesmen  Traveling  expenses  $462.50;  Salesmen's  Salaries  $1,400;  Adver- 
tising $545.73;  Office  Salaries  $700;  General  Expense  $1,324.27;  Cash  $1,147.72. 

Set  up  the  accounts  on  your  ledger  allowing  6  lines  for  each  account — after 
Accounts  Receivable,  Buildings,  and  Fixtures  allow  an  additional  6  lines  for  the 
properly  named  valuation  accounts.  Take  a  trial  balance  to  verify  your  work 
and  record  it  on  the  last  page  of  your  journal. 

Close  the  ledger,  taking  into  account  the  following  items: 
Allow  1%  depreciation  on  buildings. 

Fixtures  are  valued  at  $1,090;  merchandise  at  $21,962.40; 
Accrued  general  expense  is  $124.92;  bad  debts  are  estimated  at  $225. 


[25] 


XXIV 
PROBLEMS 

Using  the  next  blank  page  in  your  journal,  make  entries  for  the  following, 
journalizing  the  cash — make  ample  explanations: 

1.  We  accepted  May  1  at  60  days  the  draft  of  Johnson  &  Co.,  Chicago,  for  in- 
voice of  mdse.  delivered  April  30,  $217.90. 

2.  The  Hamiltonian  Bank  notified  us  May  4,  that  a  sight  draft  for  $175  for 
collection,  drawn  by  us  on  Haskin  &  Seltzer,  Bridgeport,  has  been  paid  and  the 
amount  passed  to  our  credit. 

3.  We  have  received  from  A.  H.  Neilson  &  Bros,  credit  memo  for  10  bu.  apples 
at  $1.50,  which  we  found  unsalable  and  returned. 

4.  On  April  24,  we  drew  for  collection  through  the  Mechanics  Bank  a  90-day 
draft  for  $273.50  on  A.  J.  Packard  &  Co.,  Kansas  City.     The  bank  has  delivered 
to  us  their  acceptance. 

5.  Remitted  to  Jordan  &  Anderson,  Plymouth,  Mass.,  a  New  York  draft  for 
$579.40  in  payment  of  our  acceptance  of  April  10  in  their  favor. 

6.  On  October  29  C.  H.  Henry  sent  us  a  check  for  $96.50  to  pay  for  a  bill  of 
mdse  bought  from  us  Sept.  30,  for  that  amount.     He  now  puts  in  a  claim  for  our 
regular  5%  discount  for  30  days,  which  we  allow,  sending  him  a  credit  memo. 

7.  C.  H.  Morey  presents  our  acceptance  for  $250  in  favor  of  Jackson  &  Co., 
endorsed  over  to  Morey  and  requests  that  same  be  credited  to  his  account.     We 
do  so. 

8.  Cash  was  short  $2.10. 

9.  Accepted  Aug.  24,  Bronstein  &  Co.'s  draft  on  us  for  $195.40  in  favor  of  A.  B. 
Christian  &  Sons,  drawn  at  60  days'  sight. 

10.  A  counterfeit  $5  bill  was  found  in  the  cash  sent  to  the  bank  for  deposit. 
We  were  unable  to  trace  it. 


I  26  ] 


XXV 

PRACTICE   DATA 
Instructions  to  Students.     Read  Carefully 

For  the  set  of  transactions  to  be  recorded  now  you  will  use  a  General  Journal, 
a  Sales  Journal,  a  Purchase  Journal,  a  Cash  Book,  and  a  Ledger.  At  the  top  of 
the  first  blank  page  in  your  "Journal"  blank  write  "Journal  of  I  .M.  Butcher." 
Allow  130-150  lines  for  your  Journal.  The  next  blank  DOUBLE  page  use  for 
a  Cash  Book,  marking  the  left  page  at  the  top  left  hand  margin,  "Dr."  and  near 
the  middle  "Cash."  Similarly  the  right  page,  "Cash"  and  at  the  right  hand  mar- 
gin, "Cr."  Allow  80-100  lines  for  each  side  of  the  Cash  Book.  The  next  blank 
page  mark  "Sales  Journal"  allowing  70-90  lines.  The  next  blank  page  mark 
"Purchase  Journal"  allowing  1  page.  The  last  6  or  8  pages  of  the  blank,  reserve 
for  Trial  Balances  and  Statements.  Number  consecutively  all  pages  in  both 
blanks. 

In  the  Cash  Book  use  the  first  column  on  either  side  for  items,  the  second 
column  for  totals  and  balances.  Balance  and  rule  the  Cash  Book  at  the  end 
of  each  week,  extending  the  "items"  total  before  balancing.  Enter  the  balance 
on  the  "Dr."  side  in  the  "total"  column  and  so  keep  each  week's  receipts  segre- 
gated. At  the  bottom  of  a  page,  unless  it  happens  to  coincide  with  the  end  of 
the  week,  carry  "totals"  of  each  side  forward,  not  the  balance. 

In  the  Sales  and  Purchase  Journals  mark  the  first  column  "On  Account"  and 
the  second  "Cash"  and  make  entries  in  them  according  as  sale  or  purchase  is 
"on  account"  or  "cash."  If  "cash,"  entry  must  be  made  in  the  Cash  Book  also. 
In  both  places  "check"  the  item  in  the  ledger  folio  column  as  total  sales  and  pur- 
chaser are  to  be  posted  from  their  respective  journals.  In  making  summary 
entries  at  the  end  of  the  month,  rule  and  total  each  column,  bring  the  cash  column 
total  over  on  the  next  line  into  the  "on  account"  column,  marking  it  "Cash 
Sales,  total."  Add  these  two  and  rule  off  marking  them  "Sales,  Cr."  and  Pur- 
chases, Dr."  respectively. 

Open  the  following  accounts  in  your  ledger  beginning  on  the  first  blank  page 
in  order  given  and  allowing  the  number  of  lines  to  each  account  indicated  by 
the  numeral  following  each: 

Notes  Receivable 5     I.  M.  Butcher,  Capital 10 

J.  Q.  Quinn 10     I.  M.  Butcher,  Personal 15 

U.  R.  Sexton 10     Profit  and  Loss 20 

A.  M.  Roberts 10     Sales 5 

C.  D.  Keefe 10     Purchases        10 

A.  E.  Parsons 10     In-Freight  and  Delivery 15 

J.  B.  Mimmack 10     Purchases  Returns 8 

C.  W.  Collier   10     Salesmen  Salaries 10 

Meats  Inventory 5     Advertising  10 

Furniture  and  Fixtures 10     Expense  Supplies 15 

Depreciation  Reserve  Furniture  Rent 5 

and  Fixtures 5     Insurance 8 

Building        5     Office  Salaries 10 

[  27  ] 


Lot  No.  5,  block  16 5     Sundry  Expense 8 

Notes  Payable 5     Cash  Short  and  Over        7 

Marsh  and  Sons 10     Interest  and  Discount 8 

Armour  &  Co 10     Depreciation 5 

Geib  &  Hodgson      10 

K.  and  B.  Packing  Co 10 

Mortgage  Payable 5 

Before  recording  any  transactions  study  carefully  the  accounts,  particularly 
the  expense  accounts,  which  you  will  keep.  Make  your  classification  strictly 
according  to  them.  Keep  no  additional  accounts. 

TRANSACTIONS 

March  2,  1915,  I.  M.  Butcher  purchased  the  White  Front  meat  market,  paying 
$1,940.16  therefor.  The  assets  taken  over  were:  A  note  signed  by  C.  D.  Keefe 
for  $125,  due  March  11,  after  which  it  was  to  bear  8%  interest;  outstanding  ac- 
counts, J.  Q.  Quinn  $150.25;  U.  R.  Sexton  $125.15;  A.  M.  Roberts  $240.20; 
C.  D.  Keefe  $35.20;  A.  E.  Parsons  $115.75;  J.  B.  Mimmack  $322.45;  and  C.  W. 
Collier  $30.50;  stock  of  meats  and  accessories  $2,190.87;  furniture  and  fixtures 
$500.  The  liabilities  assumed  were:  A  note  dated  Dec.  20,  1914  for  3  months 
at  6%  in  favor  of  the  K.  &  B.  Packing  Co.  for  $580.40,  the  accrued  interest  as- 
sumed being  $6.96;  accounts  due,  Marsh  &  Sons  $522.50;  Armour  &  Co.  $435.60, 
and  Geib  &  Hodgson  $349.75.  Butcher  deposited  $500  in  the  City  Bank  as  an 
additional  investment.  (Make  the  opening  journal  entry,  showing  the  CASH 
in  both  journal  and  cash  book.  Be  sure  to  give  full  explanations.) 
March  3.  Bought  for  cash:  Fuel  $22.50,  sales  tickets  $5,  account  books  $3.20, 
rent  Mar.  3-April  2,  inclusive,  $100.  Sales  were:  on  account,  J.  Q.  Quinn 
$10.75;  cash  $123.19. 

March  4.  Bought  from  Marsh  &  Sons  on  account  $592.85.  Paid  freight-in 
$17.29.  Bought  for  cash  1  year's  insurance  $24.  Sales  were:  on  account,  U.  R. 
Sexton  $12.30;  cash  $145.80. 

March  5.  Paid  Geib  &  Hodgson  balance  due  them.  Sales  were:  on  account, 
A.  M.  Roberts  $14.70,  C.  D.  Keefe  $9.20,  A.  E.  Parsons  $15.75,  C.  W.  Collier 
$8.25,  cash  $157.95. 

March  6.  Bought  from  K.  &  B.  Packing  Co.  on  account  $525.50.  Returned  to 
Marsh  &  Sons  spoiled  meats  $75.20,  Paid  freight-in  $15.26.  Sales  were:  on 
account,  J.  B.  Mimmack  $11.30,  Quinn  $12.40,  Sexton  $9.40;  cash  $161.90. 
March  7.  Received  cash  on  account  from:  Quinn  $50,  Sexton  $75,  Roberts 
$100,  Keefe  $15.  Paid:  cashier  $10,  butcher  $18.  Cash  sales  were  $170.29. 
Proprietor  drew  cash  $15  and  meat  for  the  week  $5.25. 

March  9.  Paid  Armour  &  Co.  on  account  $350;  ice  bill  $5.75;  advertising  $10.25. 
Sales  were:  on  account,  Roberts  $12.50,  Keefe  $10.40,  Parsons  $17.90,  Mimmack 
$14.90. 

March  10.     Bought  from  Armour  &  Co.  on  account  $619.70;  paid  $125  for  cash 
register.     Received  cash  on  account  from:  Parsons  $82.50,  Mimmack  $100. 
March  11.     Paid  Marsh  &  Sons  $475  on  account.     Paid  freight-in  $12.92.    Re- 
turned meats  to  Armour  &  Co.  $40.85.     Sales  were:  on  account,  Collier  $12.80, 
Quinn  $15.90. 

[  28  ] 


XXVI 
PRACTICE  DATA 

March   12.     Bought  country  chicks  and  eggs  for  cash  $50.22.     Sales  were:  on 
account.     Sexton  $14.90,  Roberts  $18.20,  Keefe  $12.75,  Parsons  $13.45. 
March  13.     Bought  from  Geib  &  Hodgson  on  account  $490.10.     Paid  freight-in 
$14.47;  Marsh  &  Sons  balance  due  them.     Sales  were:  on  account,  Mimmack 
$19.25. 

March  14.  Paid:  cashier  $10,  butcher  $18.  Cash  sales  for  the  week  were 
$1,097.25.  Proprietor  drew  cash  $12  and  meat  for  the  week  $7.50. 
March  16.  Bought  from  Marsh  &  Sons  on  account  $605.14.  Paid:  freight-in 
$20.19,  ice  bill  $6.25,  advertising  $10.25,  billheads,  stationery,  and  stamps  $7.80. 
March  17.  Bought  office  safe  $75  cash  and  paid  freight  on  safe  $7.22.  Paid 
$25.40  for  wrapping  paper,  twine,  cartons,  etc.  Paid  $3.25  for  motor  delivery 
service. 

March    18.     Cash   was  short   $1.10.     Sales  were:  on  account,   Collier  $12.90, 
Quinn  $15.25,  Sexton  $10.40,  Roberts  $13.00,  Keefe  $8.95,  Parsons  $14.80. 
March  19.     Paid  $1.50  for  sharpening  knives  and  cleavers.     Returned  meats  to 
Marsh  &  Sons  $61.43.     Bought  from  Armour  &  Co.  on  account  $475.20.     Paid 
freight  in  $18.90. 

March  20.     Paid  K.  &  B.  Packing  Co.  note  $580.40  and  interest. 
March  21.     Paid:  cashier  $10,  butchers  $36.     Cash  sales  for  the  week  were 
$1,150.95.     Proprietor  drew  cash  $15  and  meat  for  the  week  $5.75. 
March  23.     Paid:  ice  bill  $4.90,  advertising  $12,  vat  and  equipment  for  trying 
fats  $25.     Sold  on  account:     Mimmack  $12.45,  Collier  $16.50,  Quinn  $13.90. 
March  24.     Sold  bones  for  cash  $5.90.     Bought  from  Geib  &  Hodgson  on  account 
$520.90.     Paid  freight-in  $17.45. 

March  25.     Paid  delivery  service  $2.50.     Cash  was  short  95c. 
March  26.     Bought  for  cash,  turks,  chicks  and  eggs  $75.83.     Sold  on  account: 
Sexton  $11.50,  Roberts  $16.75,  Keefe  $11.85,  Parsons  $16.20,  Mimmack  $17.95, 
Collier  $13.40. 

March  27.  Returned  meats  to  Geib  &  Hodgson  $71.90.  Cash  was  over  $1.25. 
March  28.  Paid:  cashier  $10,  butchers  $36.  Cash  sales  for  the  week  were 
$1,175.69.  Proprietor  drew  cash  $10  and  meat  for  the  week  $6.50. 
March  30.  Paid:  K.  &  B.  Packing  Co.  bill  of  3-6;  Geib  &  Hodgson  $800  on  ac- 
count; ice  bill  $5.20;  advertising  $12;  proprietor's  house  milk  bill  $7.25.  Cash 
was  over  50c. 

March  31.  Bought  of  K.  &  B.  Packing  Co.  on  account  $583.60.  Paid:  freight- 
in  $11.25,  light  and  'phone  bills  $12.93.  Gave  note  at  90  days  to  Armour  &  Co. 
for  $750  with  interest  at  6%.  Collier  paid  $50  on  account.  Sales  for  the  2  days 
were  cash  $450.20.  Proprietor  took  meat  $1.10.  Bought  the  lot  $750  and  build- 
ings $1,750  in  which  the  meat  market  is  located  paying  $500  cash  and  $500  from 
private  funds,  the  remainder  secured  by  mortgage  at  6%. 


XXVII 
PRACTICE   DATA 

Balance  the  Cash  Book,  total  and  make  summary  entries  for  the  Sales  and  Pur- 
chase Journals. 

Post  completely  the  Sales  and  Purchase  Journals,  then  the  general  Journal  and 
Cash  Book. 

Take  a  trial  balance  of  account  balances  and  record  it  in  the  back  part  of  your 
"Journal"  blank  book,  labelling  it  Trial  Balance  March  31,  1915,  I.  M.  Butcher. 


XXVIII 
PRACTICE   DATA 

Close  the  ledger  taking  into  account  the  following  adjustments  and  inventories: 

Interest  accrued  on  C.  D.  Keefe's  note  56c. 

Expense  Supplies  inventory  $9.50. 

Insurance  unexpired  $22.- 

Salesmen's  Salaries  accrued  $12.- 

Office  Salaries  accrued  $3.33. 

Advertising  accrued  $4.- 

Furniture  and  Fixtures  valued  at  $725.- 

Meats  Inventory  $2,236.21. 

Take  a  post-closing  trial  balance. 


XXIX 

PROBLEM 

1.  A  trial  balance  taken  from  the  books  of  A.  P.  Lindsey  for  the  year  ending 
December  31,  1912  showed  the  following  account  balances: 
Cash  $590.21;  Notes  Receivable  $569.75;  Accounts  Receivable  $8,275.46;  Mdse. 
Inventory  $4,975.20;  Office  Furniture  $725.80;  Store  Furniture  $2,490;  Buildings 
$10,240;  Land  $3,000;  Accounts  Payable  $5,460.75;  Notes  Payable  $2,192.67; 
A. P. Lindsey, Capital  $20,000;  A.P.Lindsey,  Personal  $1,701.09;  Sales $45,932.75; 
Sales  Returns  and  Allowances  $2,193.60;  Purchases  $30,190.40;  Purchases 
Returns  and  Allowances  $2,970.80;  In-freight  and  Drayage  $3,841.39;  Salesmen's 
Salaries  $2,390.67;  Advertising  $1,140.75;  Insurance  $316;  Office  Salaries  $1,200; 
Light  and  Fuel  $750;  Office  Supplies  $250.30;  General  Expense  $1,590.55;  Inter- 
est and  Discount  $125.80  (Dr.). 

Set  up  the  accounts  on  your  ledger,  allowing  6  lines  for  each  account.     Make 
provision   for  valuation  accounts.     Take  a  trial  balance  to  verify  your  work. 

(Record  the  trial  balance  in  the  back  of  the  Journal). 
Make  adjusting  and  closing  journal  entries,  taking  into  account  the  following 

items: 

Allow  for  depreciation:     1%  on  buildings,  10%  on  store  and  office  furniture. 
Create  a  3%  reserve  for  doubtful  accounts. 
Unexpired  insurance  amounts  to  $75.40. 
Salesmen's  Salaries  accrued  $100. 
Mdse  now  on  hand  $5,190.34. 
Post  the  adjusting  and  closing  entries  and  rule  the  necessary  accounts  in  the 

ledger. 


32] 


XXX 
PROBLEM 

1.     Take  a  post-closing  trial  balance  of  Lindsey's  ledger.     Draw  up  STATE- 
MENTS of  financial  condition  and  profit  and  loss. 

Calculate  percentages  of  cost  of  sales,  gross  trading  profit,  selling  expenses, 
general  and  administrative  expenses,  and  net  profit.     (Use  "Sales"  as  the  basis.) 


33  ] 


XXXI 

PRACTICE   DATA 
Instructions  to  Students.    Read  Carefully 

This  set  comprises  one  Journal  blank,  one  Ledger,  and  a  Cash  Book.  First, 
page  each  blank  consecutively  beginning  with  the  first  page,  excluding  the  index 
pages  of  the  ledger.  Of  the  Journal  blank,  pages  i-io  inc.  will  be  used  for  the 
general  journal,  pages  11-14  mc-  f°r  the  sales  journal,  and  pages  15-17  inc.  for 
the  purchase  journal.  Pages  18-35  inc.  will  be  used  for  the  trial  balances  as  ex- 
plained later.  Of  the  Ledger  blank,  pages  1-19  inc.  will  be  used  for  the  general 
accounts,  pages  20-31  inc.  for  customers,  and  pages  32-35  inc.  for  creditors.  The 
Sales,  Purchase,  and  General  Journals  will  be  used  as  in  the  previous  set.  The 
cash  book  has  three  columns,  the  first  on  each  side  being  used  as  a  sundry  column 
in  which  all  amounts  must  be  entered  first;  the  second  column  is  for  Sales  Dis- 
counts on  the  receipts  side  and  Purchase  Discounts  on  the  disbursements  side; 
and  the  third  column  is  the  "net  cash"  column.  The  cash  balance  is  always  the 
difference  between  the  two  net  cash  columns.  When  entering  a  sale  or  purchase 
transaction  from  which  a  discount  is  to  be  taken,  the  gross  amount  of  the  invoice 
is  entered  in  the  Sundry  column,  the  discount  in  the  discount  column,  and  the 
net  cash  in  the  third  column.  In  this  way  the  extensions  and  additions  may  be 
proved,  the  sundry  column  total  equalling  the  sum  of  the  totals  of  the  other 
columns. 

In  handling  the  accounts  of  customers  and  creditors,  daily  postings  and  a 
careful  observance  of  terms  of  credit  will  be  necessary. 

The  purpose  of  this  set  is  primarily  to  give  facility  in  the  use  of  the  various 
journals  and  in  handling  quickly  a  volume  of  transactions,  summarization  of  the 
books,  and  the  taking  of  monthly  trial  balances.  To  secure  these  features  without 
too  detailed  work  on  the  student's  part,  transactions  are  summarized  for  the 
month  and  are  to  be  entered  under  date  of  the  last  day  in  each  month.  Where 
needed,  as  for  interest  calculations  on  notes,  etc.,  specific  dates  are  given. 

Before  making  any  entries,  familiarize  yourself  thoroly  with  the  accounts  to 
be  kept  in  your  ledger  and  adhere  strictly  to  that  classification.  Open  the  follow- 
ing accounts  in  your  ledger  at  the  places  indicated.  The  first  numeral  following 
the  account  title  indicates  the  page,  the  second  the  line  on  that  page.  By  "line  I  " 
is  meant  the  first  blue  line  at  the  top  of  the  page. 


Lewiston  School  Bonds  I,  i 

Notes  Receivable  i,  13 

Reserve  for  Doubtful  Accts.  i,  26 

Merchandise  Inventory  2,  i 

Electric  Light  Deposit  2,  13 

Horses,  Wagons  &  Harness  3,  i 
Depreciation  Reserve  Horses 

Wagons  &  Harness  3,  13 

Store  Furniture  &  Fixtures  4,  i 
Depreciation  Reserve  Store 

Furniture  &  Fixtures  4,  13 

Office  Furniture  &  Fixtures  5,  i 


Purchase  Returns  &  Allowances  11,26 

Salesmen  Salaries  12,  i 

Salesmen  Travelling  Expense  12,  13 

Advertising  12,  :?6 

Shipping  Expense  13,  i 

Shipping  Supplies  13,  13 

Out-freight  13, 26 

Rent  14,  i 

Insurance  14,  13 

Light,  Heat  &  Power  14,  26 

Depreciation  15,  i 

Office  Salaries  15,  13 


Depreciation  Reserve  Office 

Furniture  &  Fixtures  5,  13 

Notes  Payable  6,  I 

O.  W.  Ward,  Loan  6,  13 

O.  W.  Ward,  Capital  7,  I 

O.  W.  Ward,  Personal  7,  13 

C.  Gneisel,  Capital  8,  I 

C.  Gneisel,  Personal  8,  13 

Profit  and  Loss  9,  I 

Sales  10,  i 
Sales  Returns  &  Allowances     10,  13 

Purchases  n,  I 

In-freight  &  Cartage  n,  13 


Office  Supplies 
Office  Expense 
General  Expense 
Cash  Short  &  Over 
Charity  Donations 
Credit  Men's  Association 

Membership 
Sales  Discount 
Bad  Debts 
Miscellaneous  Sales 
Interest  &  Discount 
Purchase  Discount 


15,26 
16,  i 
16,13 
16,26 


17,26 
18,1 
18,13 
18,26 


On  pages  20-31  inc.  enter  the  following  customers'  accounts,  four  to  the  page: 


Quinn  Bros. 

Stewart  &  Son 

J.  Jackson 

S.  Koenig 

Jacob  Green 

Gristede  Bros. 

M.  J.  Downing 

Dodts'  Grocery  Store 

Casazza  &  Sons 

Capella  Bros. 

S.  Brown 

4  Corners  General  Store 

Black  Hills  Mining  Co. 

Blue  Front  Grocery 

R.  B.  Kennan 

J.  Johnson 

Bull's  Eye  Mining  Co. 

Badgley  &  Stewart 

Dewey  Brown 

Evans  Sons 

Fried  Henry 


M.  E.  Dietrich 
Jas.  Butler,  Inc. 
C.  A.  Gerken 
John  Johnson 
Fein  Bros. 
M.  Heitzman 
H.  A.  Krebs 
Andrew  Davey 
Wm.  Crick 
Russo  Bros. 
Progressive  Stores  Co. 
J.  Perlman 
P.  Peterson 
Uintah  Copper  Co. 
Circle  Bar  Ranch 
J.  R.  Rice 
Al  Morton 
J.  J.  Tommich 
J.  Henry  Witt 
U.  B.  Zipkin 
Las  Vegas  Cattle  Co. 


Beginning  on  page  32,  enter  these  creditors'  accounts,  four  to  a  page. 


Swift  &  Co. 

Korn  Products  Co. 

F.  Mezzadri 

Austin,  Nickels  &  Co. 

Reid  Murdock  Co. 

Armour  Packing  Co. 

Grand  Grocery 


Holland  Gelatine  Works 

Kataguri  Bros. 

Van  Dusen  Co. 

Delico  Food  Products  Co. 

United  Supply  Co. 

Federal  Macaroni  Co. 

Washburn  Crosby  Co. 

[35  ] 


XXXII 
PRACTICE   DATA 

O.  W.  Ward,  who  had  conducted  a  very  profitable  retail  grocery  at  Big  Falls, 
sold  his  business  for  $15,000  and  moved  to  St.  Paul  to  enter  into  a  partnership 
with  C.  Gneisel  for  the  purpose  of  carrying  on  a  wholesale  grocery  business  under 
the  firm  name  of  Ward  &  Gneisel.  Ward's  investment  was  $12,500  cash  and 
Gneisel  contributed  the  following  assets  at  the  values  stated,  which  had  been 
agreed  upon  by  the  partners;  two  notes  receivable  in  his  favor;  one  for  $1000, 
signed  by  J.  B.  Jackson,  non-interest-bearing  for  60  days,  due  February  4;  the 
other  for  $1500,  signed  by  A.  M.  Stott,  interest  at  6%  for  3  months,  due  March 
8 — both  accepted  at  face  value;  a  stock  of  groceries  valued  at  $5893.25;  delivery 
equipment  $500;  fixtures  for  store  $1000;  furniture  in  office  $150;  and  cash  neces- 
sary to  bring  his  investment  to  an  equality  with  Ward's.  The  partnership 
agreement  provided  that  Ward  was  to  be  allowed  a  salary  of  $1800  per  year  and 
Gneisel  $1500;  that  each  was  to  be  charged  with  interest  on  any  drawings  in 
excess  of  salary  from  the  date  such  drawings  exceeded  the  salary  for  the  half-year 
until  the  date  of  closing  the  books;  that  profits  and  losses  were  to  be  shared  equal- 
ly; and  that  the  books  were  to  be  closed  twice  yearly  on  June  30  and  Decem- 
ber 31  respectively.  Make  the  opening  entries  in  Journal  and  Cash  Book  for  the 
above.  Instructions  covering  unusual  entries  will  be  found  at  the  close  of  each 
"Practice  Data". 

Summarized  transactions  for  the  month  of  January  were: 

PURCHASES — Swift  &  Co.,  2-5,  n~3O,  $512.50;  Korn  Products  Co.,  3-10,  n-6o, 

$857.90;  F.  Mezzadri,  8-5,  5-10,  2-30,  n~9o,  $962.50;  Austin  Nickels  &  Co.,  5-5, 

n~30,  $1403.25;  Reid  Murdock  Co.,  3-5,  2-20,  n~3O,  $1865.05;  Armour  Packing 

Co.,  2-20,    n~3O,   $1511;    Grand  Grocery  Co.,    n-io,  $2667;    Cash    purchases, 

$134-75- 

SALES — Quinn  Bros.,  n-io,  $2189.60;  Stewart  &  Son,  1-5,  n~3O,  $3942.75; 
R.  Jackson,  n~5,  $2500.25;  S.  Koenig,  2-10,  n~3O,  $4189.40;  M.  E.  Dietrich,  2-5, 
n-6o,  $2140.50;  Jas.  Butler  Inc.,  n~5,  $3772.37;  C.  A.  Gerken,  3-10,  n~3O,  $4125; 
John  Johnson,  1-30,  n-6o,  $1819.15;  Jacob  Green,  3-5,  n~3O,  $2237.40;  Gristede 
Bros.,  i-io,  n~3O,  $3100.95;  M.  j.  Downing,  2-10,  n~3O,  $1680.40;  Dodt's  Grocery 
Store,  3-5,  n-20,  $1517.18;  Cash  sales  $567.45;  Ward  drew  groceries,  $50. 

JOURNAL — M.  E.  Dietrich  returned  unsatisfactory  goods,  $250.90;  made  C.  A. 
Gerken  allowance  of  $325  for  goods  lost  in  transit  and  filed  claim  against  the 
C.  N.  W.  Ry.  for  the  amount;  returned  Reid  Murdock  Co.  spoiled  goods,  $125; 
received  6%,  6o-day  note,  due  Mar.  28,  from  Gristede  Bros,  for  Jan.  bill,  less  a 
special  discount  of  10%. 

CASH  RECEIPTS — excluding  those  listed  above:  Quinn  Bros.,  Jan.  bill  net;  S. 
Koenig,  Jan.  bill  less  2%;  M.  E.  Dietrich,  balance  Jan.  bill  less  2%;  C.  A.  Gerken, 
balance  Jan.  bill  less  3%;  Jacob  Green,  Jan.  bill  less  3%. 

CASH  DISBURSEMENTS — excluding  those  listed  above:  Bins,  shelving,  partitions, 
counters,  etc.  for  store,  $2500;  desks,  tables,  typewriters  for  office,  $580.20;  new 
horse,  $300;  deposit  for  electric  current  meters,  $50;  sales  salaries,  $2500;  sales 

[36] 


travelling  expense,  $2650.50;  advertising  $2180.95;  shipping  clerks  $750;  lumber, 
boxes,  and  other  packing  material,  $120.80;  freight  and  drayage  bills,  $310.30; 
rent  of  store  for  Jan.,  $250;  insurance  Jan.  I,  1916  to  Jan.  I,  1917,  $116.80;  coal, 
$90;  light,  $10.82;  office  salaries,  $500;  moving  office  partitions,  $50;  account 
books,  stationery,  stamps,  etc.,  $125.90;  janitor  and  watchman  wages,  $91.80; 
gift  to  deaf  asylum,  $25;  Ward,  $150;  Gneisel  $125;  Swift  &  Co.,  Jan.  bill  less  2%; 
Korn  Products  Co.,  Jan.  bill  less  3%;  Reid  Murdock  Co.,  balance  Jan.  bill  less 
3%;  rent  for  Feb.,  $250;  F.  Mezzadri,  Jan.  bill  less  8%;  Austin,  Nickels  &  Co., 
Jan.  bill  less  5%;  Armour  Packing  Co.,  Jan.  bill  less  2%;  bo't  5  Lewiston  School 
Bonds,  bearing  6%  interest,  par  $1000,  at  101  and  accrued  interest  for  60  da., 
coupons  due  Nov.  24  and  May  24;  there  was  a  cash  shortage  of  $1.25. 

DIRECTIONS 

Enter  the  investment  transactions  complete  in  the  Journal,  checking  the  "cash" 
items.  Be  careful  to  enter  all  cash  transactions  in  the  cash  book  whether  listed 
under  "Cash"  above  or  not. 

In  entering  the  purchase  of  Lewiston  bonds,  in  the  Cash  Book  charge  "Lewiston 
School  Bonds"  account  with  the  cost  value  and  "interest  &  Discount"  with  the 
accrued  interest.  The  transaction  means  that  he  paid  1010  for  each  bond  and 
bought  out  the  seller's  right  to  the  interest  earned  up  to  the  date  of  sale.  The 
entry  of  this  accrued  interest  to  the  debit  of  Interest  &  Discount  will  offset  the 
credit  to  be  made  there  when  the  interest  for  the  six  months  is  received  and  thus 
show,  by  the  balance  between  the  two  entries,  the  true  earning  for  the  period 
during  which  the  bonds  were  held. 

No  record  is  made  on  the  books  of  account  of  the  claim  for  loss  filed  against 
the  railroad  company.  Were  there  many  such  claims,  a  Claims  Record  book 
would  be  used  as  a  memorandum  record. 

It  will  be  noted  that  some  transactions  are,  on  their  face,  for  a  longer  period 
than  the  6-months  period  under  review.  It  is  suggested,  as  a  convenient  method 
for  keeping  track  of  all  such  data  which  will  have  to  be  adjusted  at  the  end  of 
the  period,  that  page  36  in  your  Journal  be  used  as  a  memo  for  this  purpose. 
Make  record  there  of  original  date,  term  covered  by  the  payment,  amount,  and 
particulars  of  the  transaction.  For  example,  the  I  yr.,  insurance  policy  on  Jan.  I 
is  an  item  of  which  to  make  memorandum  record  here. 


[37 


XXXIII 
PRACTICE   DATA 

Summarize  the  Sales  and  Purchase  journals,  balance  the  Cash  Book,  and 
post  completely  all  books  of  original  entry. 

Take  a  trial  balance  of  your  ledger,  being  sure  to  include  the  cash  balance,  and 
record  it  under  date  of  January  31,  beginning  on  page  18  of  the  Journal  blank. 
Write"Trial  Balances  1916" at  the  top  of  the  page  and  in  the  small  space  over  the 
money  columns  "January  31".  Reserve  the  first  line  of  your  trial  balance  for 
"Cash".  From  the  Ledger,  copy  the  names  of  ALL  accounts — whether  or  not  there 
are  as  yet  any  entries  in  them — in  the  order  there  shown.  Be  careful  to  write 
the  account  name  at  the  extreme  left  of  the  "Explanation"  space,  closely  against 
the  "Date"  column.  Leave  one  line  at  the  bottom  of  the  page  for  "Totals  for- 
ward"; likewise  one  line  at  the  top  and  bottom  of  pages  24  and  30.  Since  one 
page  is  not  sufficient  to  complete  the  record,  continue  it  on  pages  24  and  30,  there 
recording  the  rest  of  the  accounts  and  heading  the  page  and  columns  as  on 
page  1 8.  The  intervening  pages  will  be  used  as  shown  in  XXXV. 


XXXIV 
PRACTICE   DATA 

Summarized  transactions  for  February  were: 

Purchases — Holland  Gelatine  Works,  2-5,  n~3O,  $3358.25;  Kataguri  Bros., 
3-10,  n-6o,  $2054.75;  Van  Dusen  Co.,  8-5,  5-10,  2-30,  n-o.o,  $3946.95;  Delico 
Food  Products  Co.,  5-5,  n~3O,  $2506.45;  United  Supply  Co.,  3-5,  2-20,  n~3O, 
$4521.55;  Federal  Macaroni  Co.,  2-20,  n~3O,  $334.05;  Washburn  Crosby  Co.,  n-io, 
$5568.30;  Cash  purchases  $155.82. 

Sales — Casazza  &  Sons,  1-5,  n~3O,  $1942.67;  Capella  Bros.,  2-5,  n-6o,  $3189.65; 
S.  Brown,  3-10,  n~3O,  $3920.18;  Four  Corners  General  Store,  3-5,  n-6o,  $4682.40; 
Black  Hills  Mining  Co.,  i-io,  n~3O,  $1580.90;  Blue  Front  Grocery,  2-5,  n-2O, 
$2967.45;  R.  B.  Kennan,  2-10,  n~3O,  $3852.75;  J.  Johnson,  1-5,  n-6o,  $4120.80; 
Bulls  Eye  Mining  Co.,  n-io,  $2879.20;  Badgley  &  Stewart,  1-5,  n~3O,  $3755.35; 
Dewey  Brown,  n~5,  $1925.47;  Evans  Sons,  2-10,  n~3O,  $3248.85;  Fried  Henry, 
2-5,  n-6o,  $3869.68;  Cash  sales,  $1236.40;  Gneisel  drew  groceries,  $60. 

Journal — Goods  were  returned  by  S.  Brown,  $i79.8o,^and  R.  B.  Kennan,  $275.20 
as  unsatisfactory;  made  Four  Corners  General  Store  an  allowance  of  $25  account 
of  inferior  goods;  the  Jan.  freight  bill,  charged  to  In-freight,  was  found  upon 
analysis  to  contain  freight  paid  on  sales  amounting  to  $29.87. 

Cash  Receipts — Stewart  &  Son,  Jan.  bill,  net;  Jas.  Butler  Inc.  Jan.  bill,  net; 
John  Johnson,  Jan.  bill  less  i%;  Casazza  &  Sons,  Feb.  bill  less  i%;  S.  Brown, 
balance  of  Feb.  bill  less  3%;  Blue  Front  Grocery,  Feb.  bill  less  2%;  Badgley  & 
Stewart,  Feb.  bill  less  i%;  Fried  Henry,  Feb.  bill  less  2%;  Cash  was  over  $2.25; 
Jackson's  note  came  due  and  was  paid  Feb.  4;  sold  crating  materials,  $20.50. 

Cash  Disbursements — Grand  Grocery,  Jan.  bill  net;  Holland  Gelatine  Works, 
Feb.  bill  less  2%;  sales  salaries  $2500;  salesmen's  railway  mileage,  entertainment, 
etc.  $2870.90;  advertising  $3670.15;  shipping  clerks  $750;  paper,  twine,  wrapping 
supplies,  $100.70;  freight  and  drayage  bills,  $750.80;  rent  for  March,  $250; 
Kataguri  Bros.,  Feb.  bill  less  3%;  light  and  power  bill,  $105.18;  office  salaries, 
$500;  Van  Dusen  Co.,  Feb.  bill  less  8%;  board  of  horses,  blacksmith,  etc.,  $125.25; 
typewriter  repairs,  $5;  Delico  Foods  Products  Co.,  Feb.  bill  less  5%;  printer's  bill 
for  office  supplies,  $72.80;  watchman  and  janitor,  $85;  gift  to  Red  Cross,  $28.75; 
United  Supply  Co.,  Feb.  bill  less  3%;  Federal  Macaroni  Co.,  Feb.  bill  less  2%; 
Ward  drew  $150;  Gneisel,  $125;  cash  was  short  $7.25. 

DIRECTIONS 

When  the  freight  and  drayage  bills  are  paid,  charge  is  made  to  In-freight  & 
Cartage.  Subsequent  analysis  shows  the  amounts  paid  on  sales  to  customers 
made  F.  O.  B.  destination.  Journal  entry  is  made  once  a  month  to  correct  the 
original  charge.  Credit  sales  of  crating  material  and  other  similar  sales  items 
to  Miscellaneous  Sales. 


39 


XXXV 

PRACTICE   DATA 

Post  completely  and  take  a  trial  balance  as  of  February  29.  In  making  record 
of  this  and  succeeding  trial  balances,  to  obviate  the  necessity  of  rewriting  account 
titles,  fold  back  the  two  money  columns  on  page  19  so  that  they  'face  up'  on 
page  20,  thus  providing  four  money  columns.  This  shortened  leaf  may  now  be 
used  for  recording  trial  balances  for  February  and  March.  Similarly  with  suc- 
ceeding leaves. 


40 


XXXVI 
PRACTICE    DATA 

Summarized  transactions  for  March  were: 

Purchases — Swift  &  Co.,  2-5,  n~3O,  $3431.65;  Austin,  Nickels  &  Co.,  5-5,  n~3O, 
$6675;  Grand  Grocery,  n-io,  $3821.95;  Reid,  Murdock  Co.,  3-5,  2-20,  n~3O, 
$7384.60;  Kataguri  Bros.,  3-10,  n-6o,  $4152.75;  Washburn  Crosby,  n-io, 
$8472.80;  F.  Mezzadri,  8-5,  5-10,  2-30,  n~9O,  $4625;  Cash  purchases  $580.19. 

Sales — Fein  Bros.,  n~5,  $3782.25;  M.  Heitzman,  3-10,  n~3O,  $4174.85;  H.  A. 
Krebs,  1-30,  n-6o,  $1279.45;  Andrew  Davey,  3-5,  n~3O,  $2854.20;  Wm.  Crick, 
i-io,  n~30,  $1915.15;  Russo  Bros.,  2-10,  n~3O,  $2518.75;  Progressive  Stores  Co., 
3-5,  n-2O,  $4189.60;  J.  Perlman,  1-5,  n~3O,  $3650.70;  P.  Peterson,  2-5,  n-6o, 
$2500;  Uintah  Copper  Co.,  3-10,  n~3O,  $1755.85;  Circle  Bar  Ranch,  3-5,  n-2O, 
$2189.60;  J.  R.  Rice,  3-5,  n-6o,  $1954.25;  Al  Morton,  i-io,  n~3O,  $4520.67; 
J.  J.  Tommich,  2-5,  n-2O,  $3979.98;  Ward  drew  groceries,  $30;  Cash  sales  $3987.40. 

Journal — Accepted  Austin,  Nickels  &  Co.,  3o-da.  sight  draft  due  April  24  for 
their  bill  of  March  less  5%;  received  goods  returned  by  Progressive  Stores  Co., 
$1125.50;  returned  musty  flour  to  Washburn  Crosby  $1500;  received  6o-da.  6% 
note,  due  5-20  from  Dodt's  Grocery  for  Jan.  bill;  received  goods  from  M.  Heitz- 
man, mistake  in  filling  order,  $1000;  out-freight  for  Feb.  was  $80.19;  received 
goods  from  Al  Morton,  inferior  quality,  $987.25;  received  3O-da.,  6%  note,  due 
Apr.  26  from  Four  Corners  General  Store  for  Feb.  bill  less  3%;  cash  shortage  of 
Feb.  is  partly  accounted  for  by  failure  to  book  a  payment  of  $5.25  for  general 
window  cleaning. 

Cash  Receipts— Capella  Bros.,  Feb.  bill  less  2%;  Black  Hills  Mining  Co.,  Feb. 
bill  net;  R.  B.  Kennan,  balance  Feb.  bill  less  2%;  A.  M.  Stott's  note  fell  due  on 
the  8th  and  was  paid  with  interest;  Dewey  Brown,  Feb.  bill  net;  Evans  Sons, 
Feb.  bill  less  2%;  Fein  Bros.,  Mar.  bill  net;  M.  Heitzman,  balance  Mar.  bill 
less  3%;  Gristede  Bros,  note  fell  due  on  the  28th  and  was  paid  with  interest; 
Andrew  Davey,  Mar.  bill  less  3%;  Progressive  Stores  Co.,  balance  Mar.  bill  less 
3%;  Circle  Bar  Ranch,  Mar.  bill  less  3%;  Cash  was  over  $1.25;  J.  R.  Rice,  Mar. 
bill  less  3%. 

Cash  Disbursements — Salesmen  salaries,  $3600;  salesmen  travelling  expense, 
$3120.80;  advertising  $2560.18;  shipping  clerks,  $900;  Swift  &  Co.,  Mar.  bill  less 
2%;  F.  Mezzadri,  Mar.  bill  less  8%;  shipping  supplies  cost  $240.25;  freight  and 
drayage  bills  were  $890.20;  rent  for  April  $250;  insurance,  i  yr.  policy,  Mar.  I, 
1916  to  Mar.  i,  1917,  $240;  extra  help  in  shipping  room,  wagon  repairs,  etc., 
$190.50;  Reid  Murdock  Co.,  Mar.  bill  less  3%;  coal,  power  and  light  bills,  $127.80; 
office  salaries,  $575;  office  expense,  $7.80;  stamps,  etc.,  $58.20;  Kataguri  Bros., 
Mar.  bill  less  3%;  bo't  office  safe,  $250  and  paid  freight  on  same,  $28.30;  gift  to 
church  bazaar,  $30.25;  i  year's  membership,  Mar.  31,  1916  to  Mar.  31,  1917,  in 
credit  men's  association,  $50;  Washburn  Crosby  bill  for" Feb.  net;  cash  was  short 
$18.40;  Ward  drew  $500;  Gneisel,  $125. 


[41 


DIRECTIONS 

Notice  that  the  cash  shortage  recorded  for  February  resulted  from  the  failure 
to  enter  an  expense  item  for  window  cleaning.  This  is  discovered  in  March  and 
should  be  corrected  by  journal  entry  debiting  General  Expense  and  crediting 
Cash  Short  and  Over,  giving  adequate  explanation. 


XXXVII 

PRACTICE   DATA 
Post  completely  and  take  a  trial  balance  as  of  March  31, 


[43  1 


XXXVIII 
PRACTICE   DATA 

Summarized  transactions  for  April  were: 

Purchases— Reid  Murdock  Co.,  3-5,  2-20,  n~3O,  $8954;  Armour  Packing  Co., 
2-20,  n-30,  $6256.55;  Korn  Products  Co.,  3-10,  n-6o,  $5820.20;  Holland  Gelatine 
Works,  2-5,  n-30,  $7778.90;  Van  Dusen  Co.,  8-5,  5-10,  2-30,  n~9O,  $9825.35; 
United  Supply  Co.,  3-5,  2-20,  n~3O,  $8703.15;  Cash  purchases  $1767.49. 

Sales— J.  Henry  Witt,  2-10,  n~3o,  $3000;  U.  B.  Zipkin,  1-5,  n-6o,  $4190.15; 
Las  Vegas  Cattle  Co.,  3-5,  n-2O,  $2150;  Quinn  Bros.,  n-io,  $3975.20;  Stewart  & 
Sons,  1-5,  n-30,  $4005.35;  S.  Koenig,  2-10,  n~3O,  $2875.45;  M.  E.  Dietrich,  2-5, 
n-6o,  $4150.60;  Jas.  Butler,  Inc.,  n~5,  $5152.75;  C.  A.  Gerken,  3-10,  n~3O, 
$2875.60;  John  Johnson,  1-30,  n-6o,  $3105.20;  Jacob  Green,  3-5,  n~3O,  $2900; 
Bulls  Eye  Mining  Co.,  n-io,  $3219.65;  Badgley  &  Stewart,  1-5,  n~3O,  $2850.70; 
Dewey  Brown,  n~5,  $3390.79;  Evans  Sons,  2-10,  n~3o,  $2760.46;  Andrew  Davey, 
3~5»  n-30,  $3840.90;  Black  Hills  Mining  Co.,  i-io,  n~3O,  $2160.50;  Cash  Sales, 
$5189.62;  Gneisel  drew  groceries,  $90;  R.  B.  Kennan,  2-10,  n~3O,  $3140.65. 

Journal — Transferred  office  cash  register  to  cash  sales  department  of  store,  $125 ; 
Returned  spoiled  canned  goods  to  Austin  Nickels  &  Co.,  adjustment  to  be  made 
at  time  of  paying  their  draft,  $350;  received  goods  returned  by  U.  B.  Zipkin  as 
unsatisfactory,  $875.50;  received  6o-da.,  6%  note,  due  June  10,  from  M.  J. 
Downing  for  Jan.  bill,  $1680.40;  received  spoiled  goods  returned  by  Stewart  & 
Sons,  of  their  Apr.  purchase,  $1250;  out-freight  for  Mar.  was  $100.25;  received 
goods  of  Apr.  bill  returned  by  Jas.  Butler  Inc.,  error  in  filling  order,  $1580.20. 

Cash  Receipts — R.  B.  Kennan,  Apr.  bill  less  2%;  J.  Johnson,  Feb.  bill  net; 
Bulls  Eye  Mining  Co.,  Feb.  bill  net;  Badgley  &  Stewart,  Apr.  bill  less  i%;  Dewey 
Brown,  Apr.  bill  net;  Four  Corners  General  Store  note  came  due  on  the  26th  and 
was  paid  with  interest;  H.  A.  Krebs,  Mar.  bill  less  i%;  Wm.  Krick,  Mar.  bill  net; 
Russo  Bros.  Mar.  bill  less  2%;  J.  Perlman,  Mar.  bill  less  i%;  received  refund 
of  $75.80  from  railroad  for  overcharges  on  freight  bills  already  paid;  income  from 
delivery  service  rendered  others  $25.40;  P.  Peterson,  Mar.  bill  less  2%;  Uintah 
Copper  Co.,  Mar.  bill  less  3%;  Al  Morton,  balance  Mar.  bill  less  i%;  J.  J.  Tom- 
mich,  Mar.  bill  less  2%;  discounted  note  at  30  da.,  8%,  due  May  26,  for  $10,000. 

Cash  Disbursements — Korn  Products  Co.,  Apr.  bill  less  3%;  salesmen's  salaries, 
$5000;  salesmen's  travelling  expenses  $4720.80;  advertising  $5000;  shipping 
clerks,  etc.  $1250.70;  packing  supplies  $150.50;  freight  and  drayage  bills  $1206.17; 
Reid,  Murdock,  Apr.  bill  less  2%;  Grand  Grocery,  Mar.  bill  net;  Washburn 
Crosby,  balance  Mar.  bill  net;  rent  for  May,  $250;  light  and  power,  $92.25;  office 
salaries,  $750;  office  expense,  $8.50;  office  supplies,  $97.60;  general  expense,  $95.68; 
sales  display  room  furniture,  $375;  comptometer  and  filing  cabinets  for  office, 
$750;  new  horse,  $315;  associated  charities,  $20.10;  cash  was  short  $3.19;  Ward 
drew  $750;  Gneisel,  $500;  paid  Austin,  Nickels  Co.,  draft  on  April  24,  with  adjust- 
ment of  $350. 


44 


DIRECTIONS 

Be  careful  to  make  proper  entry  of  the  equipment  transferred  from  office  to 
store;  of  the  railroad  refund;  and  the  delivery  service  income.  To  book  the  $10,000 
discounted  note  payable,  in  the  Cash  Book,  show  the  face  of  the  note  discounted 
in  the  General  column;  the  discount  in  the  Sales  Discount  column  but  mark  a 
small  'x'  in  front  of  it;  and  the  net  cash  as  usual.  The  Austin  Nickels  draft 
transaction,  with  $350  adjustment,  should  be  entered  completely,  including  cash, 
in  the  journal  and  posted  from  there,  the  cash  book  entry  being  'checked'. 


[451 


XXXIX 
PRACTICE   DATA 

Post  completely  and  take  a  trial  balance  as  of  Apr.  30.  In  summarizing  the 
debit  side  of  the  cash  book  previous  to  posting,  remember  that  included  in  the 
Sales  Discount  column  is  an  item  of  bank  discount  on  the  firm's  $io,ooo-note, 
which  must  be  shown  separately  and  charged  to  Interest  &  Discount.  Be  sure 
you  show  this  in  the  summary  entries,  in  addition  to  the  Sales  Discount  summary. 


[46  ] 


XL 
PRACTICE   DATA 

Summarized  transactions  for  May  were: 

Purchases — Washburn  Crosby  Co.,  n-io,  $10,149.60;  Federal  Macaroni  Co. 
2-20,  n-3O,  $5219.80;  United  Supply  Co.,  3-5,  2-20,  n~3O,  $8620.95;  Delico  Food 
Products  Co.,  5-5,  n-30,  $5419.40;  Van  Dusen  Co.,  8-5,  5-10,  2-30,  n~9o, 
$7684.25;  Kataguri  Bros.,  3-10,  n-6o,  $6714.80;  Cash  purchases,  $537.92. 

Sales — Las  Vegas  Cattle  Co.,  3-5,  n-2O,  $1200;  U.  B.  Zipkin,  1-5,  n-6o, 
$4760.40;  J.  Henry  Witt,  2-10,  n~3O,  $5120.60;  J.  J.  Tommich,  2-5,  n-2O, 
$2130.65;  Al.  Morton,  i-io,  n~3O,  $1825.75;  J-  R-  Rice,  3-5,  n-6o,  $3250.75; 
Circle  Bar  Ranch,  3-5,  n-2O,  $1314.55;  Uintah  Copper  Co.,  3-10,  n~3O,  $1192.20; 
P.  Peterson,  2-5,  n-6o,  $4376.80;  J.  Perlman,  1-5,  n~3O,  $3895.35;  Progressive 
Stores  Co.,  3-5,  n-2O,  $5940.65;  Russo  Bros.,  2-10,  n~3O,  $1937.50;  Wm.  Crick, 
i-io,  n~30,  $2562.45;  Gristede  Bros.,  i-io,  n~3O,  $10842.25;  M.  J.  Downing,  2-10, 
n~30,  $3947-75:  Casazza  &  Sons,  1-5,  n~3o,  $2100;  Capella  Bros.,  2-5,  n-6o, 
$2875.42;  S.  Brown,  3-10,  n~3O,  $1987.60;  Black  Hills  Mining  Co.,  i-io,  n~3O, 
$987.15;  J.  Johnson,  1-5,  n-6o,  $1236.40;  Ward  drew  groceries,  $100;  Cash 
sales,  $6725.43. 

Journal — Received  goods  returned  by  J.  Henry  Witt  of  their  Apr.  purchase  as 
unsatisfactory,  $1320.70;  out-freight  for  Apr.  was  $125.90;  received  goods 
returned  by  Progressive  Stores  Co.,  error  in  filling  order,  $1560.90;  Cash  over  for 
this  month  was  accounted  for  by  failure  to  record  kindling  sales,  $30.25;  received 
spoiled  goods  from  Gristede  Bros.,  $2150;  received  from  M.  J.  Downing,  I.  B. 
Perkins'  6%  6o-da.,  note  due  July  15,  $2000,  to  apply  on  account;  returned  to 
United  Supply  Co.,  goods,  on  account  of  error  in  filling  our  Apr.  order,  $1580.20; 
gave  Van  Dusen  Co.  our  note  dated  May  8  at  6o-da.,  non-interest  bearing,  but 
with  60  days'  interest,  $50,  included  in  the  face,  for  their  bill  of  Apr.  less  5% 
discount  and  cash  payment  of  $4334.08  for  balance. 

Cash  Receipts — Quinn  Bros.,  Apr.  bill  net;  Stewart  &  Son,  balance  Apr.  bill 
net;  S.  Koenig,  Apr.  bill  net;  M.  E.  Dietrich,  Apr.  bill  less  2%;  Jas.  Butler  Inc., 
balance  Apr.  bill  net;  C.  A.  Gerken,  Apr.  bill  less  3%;  John  Johnson,  Apr.  bill 
less  i%;  Jacob  Green,  Apr.  bill  less  3%;  Gristede  Bros.,  $4500  on  account;  Cash 
was  over  $30.25;  C.  N.  W.  Ry.  settled  our  claim  of  $325  for  Gerken  by  paying 
$250;  sold  packing  supplies,  $15.75;  Casazza  &  Sons,  May  bill  less  i%;  Black  Hills 
Mining  Co.,  Apr.  bill  net;  Evans  Sons,  Apr.  bill  less  2%;  Andrew  Davey,  Apr.  bill 
less  3%;  J.  Henry  Witt,  May  bill  less  2%;  U.  B.  Zipkin,  $5000  on  account;  Las 
Vegas  Cattle  Co.,  $2500  on  account;  Dodt's  Grocery  note  came  due  May  20  and 
was  paid  with  interest;  Lewiston  School  Bonds'  interest  for  the  half  year  was 
received  May  24. 

Cash  Disbursements — Salesmen's  salaries,  $6250;  salesmen's  travelling  expense, 
$6100.50;  advertising,  $5280.17;  shipping  expense,  $1392.20;  shipping  supplies, 
$120;  in-freight  and  cartage,  $1319.18;  rent  for  June,  $250;  insurance  policy  for 
I  year,  May  I,  1916  to  May  I,  1917,  $240;  light  and  power  $140.69;  office  salaries, 
$980;  Armour  Packing  Co.,  Apr.  bill  less  2%;  Holland  Gelatine  Works,  Apr.  bill 

[  47  1 


less  2%;  Van  Dusen  Co.,  $4334.08  on  account,  as  above;  United  Supply  Co., 
balance  Apr.  bill  less  2%;  office  expense,  $19.15;  office  supplies,  $175.20;  general 
expense,  $138.20;  furniture  for  store,  $625;  cash  was  short  $27.80;  donations  to 
charity,  $18.75;  paid  our  note  at  the  bank,  $10,000;  Ward  drew  $350;  Gneisel, 
$500. 

DIRECTIONS 

Transfer  the  large  credit  of  $30.25  in  Cash  Short  &  Over  to  Miscellaneous  Sales. 
The  receipt  of  $250  from  the  railroad  in  settlement  of  our  claim  against  them  might 
be  set  up  as  a  credit  to  Freight  Claims  Income  were  it  desirable  to  have  the  infor- 
mation as  to  income  from  that  source.  It  is  perhaps  best  handled  as  a  credit  to 
Sales  Returns  &  Allowances  to  offset  the  charge  here  made  at  the  time  of  the  cus- 
tomer's complaint  about  lost  goods;  and  it  will  be  so  treated  in  this  case. 

The  effect  of  adding  interest  to  the  face  of  a  non-interest  bearing  note  is  to 
secure  a  compounding  of  the  interest  if  the  note  is  not  paid  at  maturity,  as  the 
note  will  bear  legal  rate  of  interest  after  maturity.  Be  careful  to  get  the  debit 
and  credit  of  this  transaction  with  Van  Dusen  Co. 


48 


XLI 
PRACTICE   DATA 

Post  completely  and  take  a  trial  balance  as  of  May  3i 


[49] 


XLII 
PRACTICE   DATA 

Summarized  transactions  for  June  were: 

Purchases — Grand  Grocery,  n-io,  $7978.45;  Armour  Packing  Co.,  2-20,  n~3O, 
$9768.30;  Reid  Murdock  Co.,  3-5,  2-20,  n~3O,  $12,567.90;  Austin  Nickels  &  Co., 
5-5,  11-30,  $8675.20;  F.  Mezzadri,  8-5,  5-10,  2-30,  n~9O,  $1793-35;  Korn  Products 
Co.,  3-10,  n-6o,  $5787.85;  Swift  &  Co.,  2-5,  n~3O,  $9652.40;  Cash  purchases  were 

$786.45- 

Sales — R.  B.  Kennan,  2-10,  n~3O,  $3967.20;  Blue  Front  Grocery,  2-5,  n-2O, 
$1282.95;  Four  Corners  General  Store,  3-5,  n-6o,  $1875.60;  Dodt's  Grocery  Store, 
3-5,  n-20,  $2500.55;  Andrew  Davey,  3-5,  n~3O,  $3125.60;  H.  A.  Krebs,  1-30,  n-6o, 
$3527.80;  M.  Heitzman,  3-10,  n~3O,  $3768.95;  Fein  Bros.,  n~5,  $4280.20;  Fried 
Henry,  2-5,  n-6o,  $5192.67;  Evans  Sons,  2-10,  n~3O,  $1875.20;  Dewey  Brown, 
n~5,  $1225.80;  Badgley  &  Stewart,  1-5,  n~3O,  $1937.60;  Bulls  Eye  Mining  Co., 
n-io,  $875.20;  Quinn  Bros.,  n-io,  $3120.67;  Stewart  &  Son,  1-5,  n~3O,  $3940.55; 
S.  Koenig,  2-10,  n~3O,  $4120.65;  M.  E.  Dietrich,  2-5,  n-6o,  $2900;  Jas.  Butler  Inc., 
n~5,  $10,100.55;  C.  A.  Gerken,  3-10,  n~3O,  $1762.40;  John  Johnson,  1-30,  n-6o, 
$789-63;  Jacob  Green,  3-5,  n~3O,  $1250;  Casazza  &  Sons,  1-5,  n~30,  $1320.25; 
Progressive  Stores  Co.,  3-5,  n-2O,  $575.80;  Gristede  Bros.,  i-io,  n~3O,  $3140.20; 
J.  Henry  Witt,  2-10,  n~3O,  $2769.75;  Ward  drew  groceries,  $35;  Gneisel  drew 
groceries,  $65;  Cash  sales  were  $7267.40. 

Journal — Out-freight  for  May  was  $150.50;  received  goods  returned  as  unsatis- 
factory from  Andrew  Davey,  $525,  from  Fried  Henry,  $1540.10,  from  S.  Koenig, 
$1750.90;  received  from  Capella  Bros.,  A.  M.  Tuttle's  9O-da.,  6%  note,  for  $2500, 
dated  May  24,  with  24  das.  interest  accrued  to  date,  which  we  allow  them,  in 
payment  of  their  May  bill  less  2%  and  cash  payment  of  $307.91  to  balance; 
returned  inferior  goods  to  Reid  Murdock  Co.,  $2180.20  and  to  Swift  &  Co., 
$1650.80;  cash  shortage  of  May  was  partially  accounted  for  by  failure  to  book 
purchase  of  shipping  supplies,  $20.25. 

Cash  Receipts — Jacob  Green,  June  bill,  less  3%;  M.  J.  Downing,  $1000  on 
account;  Capella  Bros.,  balance  as  above;  J.  Johnson,  $1000  on  account;  Bulls 
Eye  Mining  Co.,  Apr.  bill  net;  M.  Heitzman,  June  bill  less  3%;  Wm.  Crick,  $2000 
on  account;  Russo  Bros.,  $1500  on  account;  Progressive  Stores  Co.,  balance  May 
bill  less  3%;  J.  R.  Rice,  $3000  on  account;  Al  Morton,  $1500  on  account;  J.  J. 
Tommich,  May  bill  less  2%;  M.  J.  Downing's  note  came  due  June  10  and  was 
paid  with  interest;  cash  was  over  $2.50;  sold  horse  costing  $225  for  $175;  sold  3 
Lewiston  School  Bonds  at  par  and  30  das.  accrued  interest;  Ward  made  a  loan 
to  the  business  at  6%,  dated  June  15,  of  $5000;  sold  kindling,  etc.,  $51.25. 

Cash  Disbursements — Salesmen's  salaries,  $6000;  salesmen's  travelling  expense, 
$6396.90;  advertising,  $4498.80;  shipping  expense,  $1180.35;  shipping  supplies, 
$225.40;  freight  and  drayage,  $1310.75;  rent  for  July,  $250;  office  salaries,  $960; 
office  expense,  $9.75;  office  supplies  $189.15;  general  expense,  $91.75;  cash  was 
short  $2.25;  gifts  to  charity,  $15.90;  Ward  drew  $150;  Gneisel  $125;  Kataguri 
Bros.,  $4000  on  account;  Van  Dusen  Co.,  May  bill  less  5%;  Delico  Food  Products 

[50] 


Co.,  $3000  on  account;  Federal  Macaroni  Co.,  $5000  on  account;  Washburn 
Crosby  on  account,  $3000;  new  delivery  equipment,  $750. 

DIRECTIONS 

Show  the  Tuttle  note  transaction  complete  in  the  Journal  'checking'  the  item 
in  the  Cash  Book,  with  reference  to  the  journal  entry  for  explanation.  Be  careful 
to  get  the  debit  and  credit  of  the  transaction.  For  the  delivery  horse  transaction, 
clear  H.  W.  &  H.  account  of  the  horse  sold,  at  cost  price,  by  debiting  Cash  and 
Depreciation  and  crediting  H.  W.  &  H.  the  full  amount.  Record  the  sale  of  the 
Lewiston  Bonds  as  a  credit  to  the  Bonds  account  which  will  require  adjusting  at 
closing  time  to  show  the  loss  on  the  transaction.  Ward's  loan,  credit  to  his  '  Loan ' 
account. 


[51  3 


XLIII 

PRACTICE   DATA 
Post  completely  and  take  a  trial  balance  as  of  June  30. 


[52  J 


XLIV 
PRACTICE    DATA 

Close  the  books,  thru  the  Journal,  for  the  six  months  ending  June  30,  1916, 
taking  account  of  the  following  adjustments  and  inventories: 

Accrued  Expenses — Salesmen's  salaries,  $2070;  shipping  clerks,  $200;  board  of 
horses,  $50.10;  blacksmith  bill,  $15.25;  advertising,  $500;  freight  bills,  $150.25; 
light  and  power  bills,  $106.21;  bookkeepers,  stenographers,  billing  clerks,  etc., 
$125;  office  expense,  $5.25;  janitor  and  watchman,  $90;  interest  accrued  on  Ward's 
loan,  $12.50. 

Prepaid  Expenses— J uly  rent,  $250;  insurance,  $418.40;  membership  in  credit 
men's  association,  $37.50;  interest  on  note  held  by  Van  Dusen  Co.,  $5.83. 

Accrued  Income — Interest  on  I.  B.  Perkins'  note,  45  days,  $15;  interest  on 
A.  M.  Tuttle's  note,  37  days,  $15.42;  interest  on  Lewiston  Bonds,  I  month  6  days, 

$12. 

Write  off  the  R.  Jackson  account  to  Bad  Debts  on  account  of  his  absolute 
bankruptcy. 

Out-freight  for  June  is  $182.63. 
Charge  depreciation  as  follows: 

10%  per  annum  on  store  and  office  furniture  and  fixtures. 

l6%%  per  annum  on  horses,  wagons,  and  harness,  except  on  the  last  purchase 

of  $750,  on  which  charge  no  depreciation. 

Set  aside  3%  of  the  outstanding  accounts  as  a  reserve  for  doubtful  accounts. 
Inventories  were:  Merchandise,  $16,497.23;  packing  materials,  $105.20,  office 
supplies,  $75.18. 

Upon  appropriation  of  profits,  take  account  of  the  agreement  as  to  salaries  and 
excess  drawings.  For  interest  calculations,  assume  that  drawings  are  made  on 
the  last  day  of  the  month. 


53 


XLV 
PRACTICE   DATA 

Draw  up  pro  forma  statements  of  profit  and  loss  and  financial  condition  for 
Ward  £  Gneisel  for  the  six  months.  In  drawing  up  the  statements  include  'Mis- 
cellaneous Sales'  with  merchandise  sales  under  the  general  head  'Sales,'  and 
segregate  trading  expenses — including  the  depreciation  on  the  trading  equipment 
— from  general  and  administrative  expenses.  As  a  matter  of  convenience,  record 
these  statements  in  the  back  of  the  cash  book. 


[54 


XLVI 
PROBLEM 

A  partnership  agreement  provides  that  before  net  profits  shall  be  determined, 
the  partners  shall  be  charged  with  6%  interest  on  their  'personal'  withdrawals 
from  the  dates  of  such  withdrawals  to  the  date  of  closing  the  books  and  that 
net  profits  shall  be  divided  in  proportion  to  the  net  'capital'  investments  and  the 
length  of  time  of  their  investment.  The  profits  before  taking  the  above  into  con- 
sideration were  $3569.72  and  the  partners'  combined  capital  and  personal  accounts 
show  as  follows: 

A.  K.  A  very 


1914 

1914 

Jan.    20. 

Capital 

5,000.00 

Jan.      i. 

Capital 

10,000.00 

Feb.  28. 

Personal 

300.00 

Feb.    15. 

Capital 

2,500.00 

April  10. 

Capital 

3,000.00 

May  10. 

Capital 

5,000.00 

June  10. 

Personal 

250.00 

C.  E.  Clarence 


1914 

1914 

Feb.     i. 

Personal 

250.00 

Jan.    15. 

Capital 

5,000.00 

Mar.  15. 

Capital 

7,500.00 

May  20. 

Capital 

5,000.00 

May  31. 

Personal 

300.00 

June  10. 

Capital 

5,000.00 

If  the  books  are  closed  on  June  30,  1914,  what  is  each  partner's  share  of  the 
profits? 


55  ] 


XLVII 
PRACTICE   DATA 

Instructions  to  Student.     Read  Carefully. 

This  set  comprises  a  general  journal,  a  sales  journal,  a  sales  returns  and  allow- 
ances journal,  a  purchase  journal,  a  purchase  returns  and  allowances  journal,  and 
the  cash  journals,  for  convenience  bound  together  in  one  blank;  a  note  journal 
to  be  used  as  a  posting  medium  for  notes  receivable  and  notes  payable;  and  a 
general  ledger,  a  purchase  ledger,  and  a  sales  ledger  bound  together  in  one  blank. 
Of  the  journal  blank,  pages  1-8  comprise  the  general  journal,  page  9  the  sales 
journal,  page  10  the  sales  returns,  page  n  the  purchase  journal,  page  12  the  pur- 
chase returns,  and  page*  14-15  the  cash  journals.  Of  the  ledger  blank,  pages  1-15 
will  be  used  as  the  general  ledger,  pages  16-19  the  sales  ledger,  and  pages  20-22 
the  purchase  ledger.  The  general  journal  will  be  used  as  previously,  i.e.,  for  the 
record  of  all  items  not  otherwise  specially  provided  for;  the  sales  journal  provides 
for  analysis  of  the  sales,  the  first  column  being  the  total  or  general  column,  the 
others,  ' Dept.  A',  ' Dept.  B ',  and  'Out-freight'  respectively;  the  sales  returns  and 
allowances  journal  makes  provision  for  the  same  analysis  as  the  sales  journal 
except  that  there  is  no  'Out-freight'  column,  that  not  being  used;  the  purchase 
journal  columns  are  respectively,  'Total',  'Dept.  A',  'Dept.  B'  and  'Sundries', 
with  the  same  column  headings  for  the  purchase  returns  and  allowances  journal. 
The  cash  book  columns  will  be,  on  the  debit,  'General',  'Sales  Ledger',  'Sales 
Discount ',  and  '  Bank '  and  on  the  credit,  '  General ',  '  Purchase  Ledger ',  '  Purchase 
Discount',  and  'Bank'.  The  note  journal  will  be  analyzed,  summarized,  and 
posted  just  as  the  other  subsidiary  journals  are  handled. 

Daily  posting  of  items  affecting  customers'  and  creditors'  accounts  should  be 
made,  observing  carefully  terms  of  credit. 

The  purpose  of  the  set  is  to  give  practice  in  handling  various  controlling  ac- 
counts; the  summarization  and  ruling  of  columnar  books;  and  to  bring  out  some 
of  the  difficulties  involved  in  treating  controlling  accounts  under  given  conditions. 
Record  will  be  made  of  transactions  for  the  last  month  of  the  fiscal  year,  the  pre- 
vious eleven  months  being  summarized  in  the  trial  balance  given  to  start  with. 

The  Hardware  Specialties  Co.  was  organized  and  incorporated  under  the  laws 
of  the  State  of  New  York.  Its  fiscal  year  closes  on  November  30.  A  trial  balance 
from  the  general  ledger  on  October  31,  19 — ,  shows  as  follows: 

I,  City  National  Bank $  5,250.69 

I,  Petty  Cash 150.00 

i,  Notes  Receivable 7, 390-5° 

1,  Sales  Ledger 75,820.75 

2,  Reserve  for  Doubtful  Accounts $  1,319.86 

2,  Reading  Ry.  Stock 10,1 12.50 

2,  Department  A,  Inventory 22,362.36 

2,  Department  B,  Inventory 18,179.40 

3,  Store  &  Warehouse  Furniture  &  Fixtures 2,310.75 

[  56  ] 


3,  Depreciative  Reserve,  Store  &  Warehouse  F.  &  F.  $508.20 

3,  Office  Furniture  &  Fixtures $850.25 

3,  Depreciation  Reserve,  Office  F.  &  F 170  30 

4,  Delivery  Equipment 3,79O-7O 

4,  Depreciation  Reserve,  Delivery  Equipment 718.41 

4,  Buildings 46,210.00 

4,  Depreciation  Reserve,  Buildings 1,470.75 

5,  Land 15,000.00 

5,  Notes  Payable 14,157.83 

5,  Purchase  Ledger 55>°94-3I 

5,  Mortgage  on  Real  Estate 10,000.00 

6,  Unissued  Capital  Stock 20,000.00 

6,  Capital  Stock 125,000.00 

6,  Surplus 44,862.19 

7,  Trading 

7,  Profit  and  Loss 

8,  Department  A,  Purchases 332,190.80 

8,  Department  A,  Purchase  Returns  &  Allowances.  10,120.68 

8,  Department  B,  Purchases 295,780.19 

8,  Department  B,  Purchase  Returns  &  Allowances.  9,876.20 

9,  In-freight  &  Cartage 6,125.63 

9,  Department  A,  Sales 401,675.35 

9,  Department  A,  Sales  Returns  &  Allowances 7,392.15 

9,  Department  B,  Sales 359,817.50 

10,  Department  B,  Sales  Returns  &  Allowances 4,563.27 

10,  Salesmen's  Salaries 25,190.00 

10,  Travelling  Expenses 19,240.80 

10,  Advertising 14,640.75 

n,  Sales  General  Expense 4,870.13 

n,  Out-freight 216.13 

n,  Insurance 5,760.20 

n,  Office  Expense 1,100.25 

12,  General  Expense 55,172.40 

12,  General  Salaries 29,275.80 

12,  Interest  &  Bank  Expense 1,250.18 

12,  Sales  Discount 12,769.80 

13,  Bad  Debts 

13,  Depreciation 

13,  Purchase  Discounts 8,174.80 

14,  Consignment,  J.  B.  Grover 

14,  Consignments-Out 

1,042,966.38  1,042,966.38 

Open  all  the  above  accounts  in  your  general  ledger,  at  the  places  indicated,  and 

enter  under  date  of  Nov.  I  the  balances  given  in  the  trial  balance.    The  number  in 

front  of  the  account  title  indicates  the  page  on  which  to  enter  the  accounts.    Give 

[  57  J 


each  one-fourth  of  a  page,  except  on  page  7,  where  give  Trading  one-fourth  and 
Profit  &  Loss  three-fourths. 

In  the  Sales  Ledger,  beginning  on  page  16,  open  the  following  accounts,  four 
to  a  page,  and  enter  the  balances  as  of  Nov.  I : 

Colonial  Supply  Co $  1,250.60 

Block  Hardware  Co 2,100.10 

Ted  S.  Class 1,780.90 

Frank  &  Bros i  ,590. 1 7 

M.  Shapiro  &  Co .7,008.73 

A.  Mishkin 1,190.16 

J.  Kapner 2,317.69 

L.  M.  Hoffman 1,670.80 

B.  F.  Salzer 1,419.25 

Lowell  &  Meservy 1,975.63 

Builders  Supply  Co 3,100.72 

Sundry  Customers 55,416.00 


$75,820.75 

The  '  Sales  Ledger '  account  on  the  general  ledger  controls  this  ledger. 

In  the  Purchase  Ledger,  beginning  with  page  20,  open  the  following  accounts, 
four  to  a  page,  and  enter  the  balances  as  of  Nov.  I : 

American  Hardware  Supply  Co $  3,119.83 

Mechanics  Hardware  Co 2,567.20 

Norton  Door  Check  Co 1,176.19 

The  Stanley  Works i, 935.73 

Simmons  Hardward  Co 2,875.50 

Dixie  Lumber  Co 

Central  Machinery  &  Supply  Co 4,100.93 

Griffen  Manufacturing  Co 751.82 

Sundry  Creditors 38,567. 1 1 


55,094.31 

The  '  Purchase  Ledger '  account  on  the  general  ledger  controls  this  ledger. 

The  two  accounts,  'Sundry  Customers'  and  'Sundry  Creditors'  are  used  to 
secure  volume  of  transactions  without  involving  too  great  detail.  They  should 
be  treated  in  all  respects  as  personal  accounts. 

In  the  Notes  Receivable  Journal,  enter  the  following  notes: 

No.  57,  made  by  Ted  S.  Class  in  our  favor,  for  mdse.,  dated  Aug.  5,  19 — ,  for 

3  mo.  at  6%,  amount,  $1,875.15. 
No.  61,  draft  drawn  by  us  on  M.  Shapiro  &  Co.,  dated  Sept.  25,  at  60  das., 

amount,  $1,750. 
No.  63,  made  by  B.  F.  Salzer  in  our  favor,  for  mdse.,  dated  Oct.  I,  at  6%,  for 

2  mos.,  amount,  $1,765.35. 

[  58  ] 


No.  65,  made  by  Builders  Supply  Co.,  in  our  favor,  for  mdse.,  dated  Oct.  15, 
at  6%  for  30  das.,  amount,  $2,000. 

Enter  these  in  the  Notes  Receivable  Journal,  add  them  in  the  'Amount'  column 
and  rule  it  off  as  they  are  already  posted  in  your  General  Ledger  '  Notes  Receiv- 
able' account. 

In  the  Notes  Payable  Journal,  enter  the  follov/ing  notes: 

No.   15,  made  by  ourselves  in  favor  of  the  City  National  Bank  for  discount,  dated 

Sept.  23,  at  8%  for  60  das.,  amount,  $10,000. 
No.  1 6,  draft  by  Sundry  Creditors,  accepted  by  ourselves,  dated  Oct.  13,  for 

2  mos.,  amount,  $4,157.83. 

Enter  these  in  the  Notes  Payable  Journal  and  treat  as  with  Notes  Receivable 
above. 

Your  books  will  now  show,  general  and  subsidiary,  the  condition  as  at  the  begin- 
ning of  business  Nov.  i. 


59 


XL  VIII 
PRACTICE   DATA 

Make  record  in  the  various  books  of  original  entry  of  the  transaction  for 
November.    Where  needed,  directions  appear  at  the  close  of  each  lesson. 

Nov.  I.  Sold  Colonial  Supply  Co.,  1-5,  n~3O,  $967.40  (A)  and  $205.10  (B)  on 
which  we  prepaid  freight  and  charged  to  them  $30.65.  Received  cash 
on  account  from  A.  Mishkin,  $1000.  Paid  cash  on  account  to  The 
Stanley  Works,  $435.73. 

Nov.  2.  Bo't  of  American  Hardware  Supply  Co.,  3-5,  n-2O,  $1963.75  (A)  and 
$2189.62  (B).  Sold  Block  Hardware  Co.,  2-10,  n-6o,  $1242.75  (A)  and 
$963.29  (B).  Received  cash  on  account  from  Ted  S.  Class,  $1780.90. 
Paid  cash  on  account  to  Central  Machine  &  Supply  Co.,  $4000. 

Nov.  3.  Sold  Ted  S.  Class,  n~5,  $2120.75  (A).  Received  cash  on  account  from 
Colonial  Supply  Co.,  $1000. 

Nov.  4.  Sold  Griffen  Mfg.  Co.,  3-10,  n~3o,  $314-75  (A)  and  $175.20  (B). 
Received  cash  on  account  from  M.  Shapiro  &  Co.,  $2008.73. 

Nov.  6.  Bo't  of  Mechanics  Hardware  Co.,  5-10,  n~3O,  $i  126.81  (A)  and  $1093.42 
(B).  Sold  Frank  &  Bros.,  2-5,  n~3O,  $1250  (A)  and  $319.25  (B),  with 
prepaid  freight  charged  them  $17.40.  Received  cash  on  account  from 
Block  Hardware  Co.,  $2000.  Gave  our  note  No.  17  at  6%  for  30  das., 
favor  of  American  Hardware  Supply  Co.  to  apply  on  account,  $2500. 

Nov.  7.  Sold  M.  Shapiro  &  Co.,  1-5,  n-6o,  $2500  (B).  Our  note  No.  57,  Ted  S. 
Class,  maker,  came  due  and  was  paid  with  interest.  Paid  cash  to 
American  Hardware  Supply  Co.,  for  inv.  Nov.  2  less  3%. 

Nov.  8.  Sold  A.  Mishkin,  i-io,  n~3O,  $790.30  (A)  and  $410.75  (B).  Block 
Hardware  Co.  returned  goods,  inv.  Nov.  2,  $15.32  (A)  and  $125.61  (B). 
Received  from  Colonial  Supply  Co.  their  note  dated  Nov.  6,  for  30  das. 
at  6%  in  payment  of  inv.,  Nov.  I  less  i%. 

Nov.  9.  Bo't  of  Norton  Door  Check  Co.,  i-io,  n-6o,  $2819.18  (A)  and  $1371.93 
(B).  Paid  cash  for  insurance  policy,  $590.20. 

Nov.  10.  Sold  J.  Kapner,  i-io,  n-6o,  $1745.75  (A)  and  $730.19  (B).  Received 
cash  on  account  from  L.  M.  Hoffman,  $1670.80. 

Nov.  ii.  Bo't  of  The  Stanley  Works,  n-6o,  $3100.95  (A).  Sold  L.  M.  Hoffman, 
2-5,  n~9O,  $1010.90  (A)  and  $593.70  (B).  Griffen  Mfg.  Co.  returned 
goods,  inv.  Nov.  4,  $69.81  (A)  and  $93.74  (B). 

Nov.  13.  Sold  B.  F.  Salzer,  3-5,  n-6o,  $527.55  (A)  and  $1013.05  (B).  Frank  & 
Bros,  returned  goods,  inv.  Nov.  6,  $72.17  (A)  and  $25.83  (B).  Received 
cash  from  Frank  &  Bros,  for  balance  inv.  Nov.  6  less  2%.  Bo't  new 
equipment  for  the  office,  $375  cash. 

Nov.  14.  Bo't  of  Simmons  Hardware  Co.,  3-10,  n~3O,  $819.36  (A)  and  $3181.64 
(B).  Sold  Lowell  &  Meservy,  i-io,  n~3O  $1190.10  (A)  and  $970.16  (B), 
with  prepaid  freight  charged  to  them,  $51.19.  Received  cash  from 
Block  Hardware  Co.  for  balance  inv.  Nov.  2  less  2%. 

[60] 


Nov.  15.  Sent  a  consignment  of  Department  B  goods,  $1500,  to  J.  B.  Grover  to 
be  sold  for  our  account  on  a  5%  commission  basis.  Drew  a  3O-das. 
sight  draft  on  Frank  &  Bros,  to  apply  on  account,  $1000,  which  he 
promised  to  accept.  Received  cash  from  Ted  S.  Class  for  inv.  Nov.  3. 
Paid  out-freight  charges,  $175.80. 

DIRECTIONS 

Be  sure  to  enter  the  opening  cash  balance  in  both  the  General  and  Bank  col- 
umns of  the  Cash  Book. 

The  '  (A) '  and  '  (B) '  following  sales  and  purchase  transactions  show  the  sales 
or  purchases  for  Department  A  and  Department  B. 

The  prepaid  freight  which  is  to  be  charged  to  the  Colonial  Supply  Co.  on  Nov.  I 
is  to  be  entered  in  the  out-freight  column  of  the  Sales  Journal  and  included  in  the 
Total  column  amount  to  be  charged  them. 

The  Griffen  Mfg.  Co.  account  is  a  mixed  creditor  and  customer  account,  bu- 
is  carried  only  in  the  Purchase  Ledger.  Make  journal  entry  to  adjust  the  cont 
trolling  accounts  as  soon  as  sale  of  Nov.  4  is  entered  in  Sales  Journal. 

On  Nov.  8,  the  note  transaction  with  the  Colonial  Supply  Co.  involves  a  Sales 
Discount.  Since  no  provision  is  made  in  the  Note  Journal  for  such,  it  will  have 
to  be  run  thru  the  general  journal.  Make  the  entry  as  follows: 

Sales  Discount $12.03 

Colonial  Supply  Co.  (Sales  Ledger) 12.03 

The  '  (Sales  Ledger) '  shows  that  the  controlling  account  is  affected  and  must 
be  credited,  also,  to  maintain  a  proper  control,  there  being  no  special  'Sales 
Ledger'  column  in  the  journal  for  such  transactions. 

The  Griffen  Mfg.  Co.  returned  sales  of  Nov.  n  must  be  adjusted  thru  the 
journal  as  in  the  Nov.  4  transaction,  but  of  opposite  effect. 

Raise  memo  accounts  thru  the  journal  for  the  J.  B.  Grover  consignment  of 
Nov.  15. 


[61  ] 


XLIX 
PRACTICE   DATA 

Nov.  16.  Bo't  of  the  Dixie  Lumber  Co.,  11-90,  lumber  and  supplies  for  the  building 
of  sky  lights  on  our  warehouses,  $723.18  with  freight  charges  of  $59.20 
We  returned  to  Norton  Door  Check  Co.,  inv.  Nov.  9,  $421.16  (A)  and 
$83.24  (B).  Sold  Builders  Supply  Co.,  n-6o,  $1920.18  (A)  and  $1000 
(B).  Gave  our  note  No.  18  at  6%  for  30  das.,  favor  Mechanics  Hard- 
ware Co.,  for  inv.  Nov.  6  less  5%.  Received  cash  from  M.  Shapiro  & 
Co.  for  inv.  Nov.  7  less  i%. 

Nov.  17.  Sold  Colonial  Supply  Co.,  1-5,  n~3O,  $579.63  (A)  and  $814.12  (B),  with 
prepaid  freight  charged  to  them  $32.16.  Our  note  No.  65,  Builders 
Supply  Co.,  maker,  came  due  and  was  paid  with  interest.  Paid  in- 
freight  and  cartage  bills  to  date,  $364.20. 

Nov.  1 8.  Bo't  of  Central  Machine  &  Supply  Co.,  2-5,  n-6o,  $1283.17  (A)  and 
$2719.72(6).  Sold  Ted  S.  Class,  n~5,  $879.63  (A)  and  $479.81  (B). 
B.  F.  Salzer  returned  goods,  inv.  Nov.  13,  $110.35  (A)  and$38.25  (B). 
Drew  from  stock  for  building  sky  lights,  goods,  $200  (A)  and  $57.80 
(B).  Paid  Norton  Door  Check  Co.  balance  inv.  Nov.  9  less  i%. 

Nov.  20.  We  returned  to  Simmons  Hardware  Co.,  inv.  Nov.  14,  $89.33  (A)  and 
$187.55  (B).  The  receiver  announced  there  would  be  no  dividends  paid 
by  one  of  our  bankrupt  Sundry  Customers  who  owed  us  $219.57.  We 
accepted  The  Stanley  Works  draft,  to  apply  on  account,  drawn  at 
60  das.  from  date  Nov.  15,  amount  $1500. 

Nov.  21.  Bo't  of  Griffen  Mfg.  Co.,  3-10,  n~3O,  $2901  (A)  and  $1275.91  (B).  Sold 
M.  Shapiro  &  Co.,  1-5,  n-6o,  $867.50  (A)  and  $1375.90  (B).  Builders 
Supply  Co.  returned  goods,  inv.  Nov.  16,  $172.18  (A)  and  $114.27  (B). 
Received  cash  from  B.  F.  Salzer  for  balance  inv.  Nov.  13  less  3%. 

Nov.  22.  Bo't  of  American  Hardware  Supply  Co.,  3-5,  n-2O,  $983.67  (A)  and 
$2875.28  (B).  Sold  J.  Kapner,  i-io,  n-6o,  $919.55  (A)  and  $1591.25 
(B).  Received  cash  from  Colonial  Supply  Co.  for  inv.  Nov.  17  less  i%. 
City  National  Bank  notified  us  that  our  account  was  charged  with 
$10,000  on  account  of  our  note  No.  15,  due  this  day. 

Nov.  23.  Bo't  of  Norton  Door  Check  Co.,  i-io,  n-6o,  $137943  (A)  and  $2519.77 
(B).  Discounted  our  note  No.  20  at  8%  for  60  das.,  at  City  National 
Bank,  face  of  note  $5000.  Paid  Central  Machine  &  Supply  Co.,  inv. 
Nov.  8  less  2%. 

Nov.  24.  Bo't  of  Simmons  Hardware  Co.,  3-10,  n~3O,  $3520.18  (A)  and  $492.16 
(B).  Sold  L.  M.  Hoffman,  2-5,  n-9O,  $319.36  (A)  and  $1580.25  (B). 
Received  cash,  account  of  cash  sales  $125.16  (A)  and  $114.34  (B). 
Paid  Simmons  Hardware  Co.,  balance  inv.  Nov.  14  less  3%.  Issued 
our  check  for  $10  on  account  of  inability  to  make  change.  Received 
letter  from  Ted  S.  Class  calling  attention  to  overcharge  of  $100  in  inv. 
Nov.  1 8  due  to  error  in  addition. 

Nov.  25.  Bo't  of  Dixie  Lumber  Co.,  n-QO,  lumber  for  repairing  buildings, 
$651.72  with  freight  charges,  $51.19.  We  returned  to  Sundry  Creditors 

r  62 1 


$509-26  (A)  and  $722.73  (B).  Sundry  Customers  returned  goods, 
$215.52  (A)  and  $119.35  (B).  Received  note  at  6%  for  30  das.,  dated 
Nov.  16,  from  L.  M.  Hoffman  for  inv.  Nov.  n  less  2%.  The  bank 
notified  us  that  M.  Shapiro's  draft  due  yesterday  had  gone  to  protest 
and  our  account  charged  with  protest  fees  of  $2.50  for  which  we  issue 
them  our  check.  Received  cash  from  J.  Kapner  for  inv.  Nov.  16  less 
I  %.  Paid  advertising  bill,  $2543.65. 

Nov.  27.  Sold  Builders  Supply  Co.,  n-6o,  $1725.17  (A)  and  $1836.10  (B). 
Received  cash  from  M.  Shapiro  &  Co.  for  protested  note  and  fees, 
$1752.50,  stating  that  protest  was  in  error.  Paid  American  Hardware 
Supply  Co.  inv.  Nov.  22  less  3%. 

DIRECTIONS 

Nov.  1 6.  Enter  the  Dixie  Lumber  Co.  purchase  in  the  Total  and  Sundries 
columns,  marking  it  as  a  charge  to  'Buildings'.  The  'Purchase 
Discount '  on  the  Mechanics  Hardware  Co.  note  transaction  is  handled 
thru  the  journal,  similarly  to  the  Colonial  note  on  Nov.  8. 

Nov.  20.  Charge  off  the  bankrupt  Sundry  Customer  to  the  Reserve,  being  careful 
to  indicate  the  controlling  account  affected. 

Nov.  23.  Enter  discount  on  $5000  note  in  Sales  Discount  column  with  an  'x' 
in  front  of  it.  Enter  the  note  also  in  the  Notes  Payable  Journal  with 
an  'x'  in  front  of  the  amount  column.  These  are  for  use  as  guides  in 
summarizing. 

Nov.  24.  Be  careful  about  the  $10  check  for  change  and  the  Class  overcharge. 

Nov.  25.  The  Dixie  Lumber  Co.  transaction  is  similar  to  that  of  Nov.  16  ex- 
plained above.  Handle  carefully  the  Hoffman  note  and  sales  discount. 
Charge  Shapiro  by  journal  entry  with  the  protested  note.  His  charge 
for  fees  will  come  from  the  Cash  book  where  the  controlling  account 
affected  must  be  indicated. 


I  63  J 


PROBLEM    i 

A  corporation  is  formed  with  a  capital  stock  of  $100,000,  entirely  subscribed 
for  and  with  two-fifths  paid  in  cash.  Show  journal  entries  covering: 

PROBLEM   2 

The  remaining  three-fifths  of  the  capital  in  No.  I  is  subject  to  call  at  the  end 
of  each  succeeding  month.  The  first  call  has  been  made  and  one-half  paid  in. 
Show  journal  entries  covering. 

PROBLEM   3 

Lehman  and  Underwood,  partners  in  a  trading  business,  decide  to  incorporate. 
The  authorized  capital  stock  is  to  be  $50,000;  shares  $50  par  value.  They  interest 
J-  Q-  Quinn  and  I.  M.  Bean  in  the  new  company,  receiving  subscriptions,  paid  in 
cash,  for  100  and  300  shares  respectively.  Lehman  and  Underwood  subscribe 
for  the  remaining  stock  in  the  ratio  of  their  interests  in  the  old  business,  which 
at  that  date  shows  as  follows: 

Assets  Liabilities  and  Capital 

Cash $  4,500.00  Accounts  Payable $  5,269.30 

Stock 8,250.00  Mortgage  Payable 4,500.00 

Accounts  Receivable 10,690.30  Notes  Payable 1,500.00 

Notes  Receivable 1,250.00  Rent  Accrued 125.00 

Land 6,000.00  Interest  Accrued 26.00 

Buildings 5,000.00  Lehman,  Capital 17,470.00 

Furniture  &  Fixtures 1,000.00  Underwood,  Capital 8,735.00 

Delivery  Equipment 875.00 

Insurance  Prepaid 50.00 

Interest  Accrued.  .  10.00 


$37,625.30  $37,625.30 

They  pay  their  subscriptions  by  turning  over  to  the  corporation  their  old 
business  at  the  values  stated  above  except  the  cash  which  is  retained  by  them 
personally.  Open  a  new  set  of  books  for  the  corporation.  Close  the  partnership 
books  and  show  distribution  of  assets. 

PROBLEM   4 

The  Jackson  Co.  has  outstanding  capital  stock  of  $75,000.  This  year's  Profit 
&  Loss  shows  a  profit  of  $2120.69.  The  previous  Surplus  balance  is  $12,182.40. 
They  declare  and  pay  a  6%  dividend.  Show,  in  journal  form,  the  entries  covering 
the  above. 

[64  ] 


LI 
PRACTICE   DATA 

Nov.  28.  Bo't  of  Griffen  Mfg.  Co.,  3-10,  11-30,  $1193.69  (A)  and  $2987.12  (B), 
with  prepaid  freight  charged  to  us  of  $193.72.  Received  cash  from 
Lowell  &  Meservy  for  inv.  Nov.  14  less  i%.  Made  partial  payment  on 
sky  light  contract  $192.50. 

Nov.  29.  Bo't  of  Sundry  Creditors,  3-10,  n~3O,  $8084.29  (A)  and  $11,057.08  (B). 
Sold  Sundry  Customers,  2-5,  n~3O,  $21,491.98  (A)  and  $22,821.69  (B). 
Received  note  at  6%  for  2  mo.,  dated  Nov.  18,  from  A.  Mishkin  for 
inv.  Nov.  8  less  i%.  Received  cash  from  Sundry  Customers  for 
invoices  amounting  to  $46,875.10  less  discount  of  $910.10.  Received 
cash  from  sale  of  office  safe  $150.  The  safe  had  cost  $250,  this  year's 
depreciation  being  estimated  at  $15.  Reimbursed  petty  cashier  for 
vouchers  turned  over,  $134.75  and  distributed  same,  $75.80  to  Sales 
General  Expense,  $10.19  to  Office  Expense,  and  $48.76  to  General 
Expense.  Paid  Sundry  Creditors,  invoices  of  $18,697.23  less  $317.13 
discount.  Paid  salesmen  salaries  $3750,  travelling  expense,  $3,675.80, 
sales  general  expense  $672.50,  general  salaries,  $3971.20,  interest  and 
bank  expense  $115.75,  and  general  expense,  $6127.80.  Charge  Build- 
ings, thru  the  journal,  with  $35  of  the  general  salaries  paid  our  own 
mechanic  for  work  on  the  sky  lights. 

DIRECTIONS 

Study  the  office  safe  sale  transaction  carefully.  Make  complete  entry  of  it  in 
the  journal. 

Summarize  the  various  subsidiary  journals  carefully,  taking  note  of  any 
extraneous  items.  This  applies  particularly  to  the  Purchase  Journal.  In  the 
Notes  Payable  summary  treat  the  $5000  note  separately  as  it  is  posted  from  the 
Cash  Book  where  also  its  discount  must  be  listed  separately  in  the  summary 
entry.  In  summarizing  the  cash  receipts  you  must  subtract  the  Nov.  I  balance 
before  obtaining  the  correct  charge  to  the  bank. 


[65  1 


LII 
PRACTICE   DATA 

Post  completely  and  take  a  trial  balance  of  the  general  ledger,  recording  it  on 
page  7  of  your  general  journal.  When  posting  customers'  and  creditors'  accounts, 
make  sure  that  the  corresponding  controlling  accounts  will  receive,  either  in  totals 
or  in  items,  the  same  amounts.  Prove  your  Sales  and  Purchase  Ledgers  and 
record  the  proof  formally  on  page  8  of  the  general  journal. 


[  66  ] 


LIII 
PROBLEM    i 

What  single  rate  of  discount  is  equivalent  to  the  series  20%,  20%,  and  20%? 
50%,  10%,  and  5%? 

PROBLEM   2 

Feb.  I,  1915,  the  bank  rendered  statement  of  account  of  Jackson-Richter, 
showing  a  balance  subject  to  check  of  $3950.26.  Jackson- Richter's  cash  book 
showed  $4190.38.  In  reconciling,  the  following  information  is  secured.  Jackson- 
Richter  checks  outstanding  were,  No.  219  for  $125,  No.  230  or  $75.20,  No.  201 
for  $19.18,  No.  241  for  $605.73,  No.  236  for  $5.25,  No.  225  for  $21.40,  and  No.  217 
for  $6.30;  checks  on  out-of-town  banks  deposited  for  collection  and  credit  but  not 
yet  credited,  Utica  $598.18,  Syracuse  $720.50,  Buffalo  $279.50. 

Prepare  a  reconciliation  statement. 

PROBLEM    3 

Upon  establishing  an  'Accounts  Receivable'  controlling  account  on  the  general 
ledger  the  total  of  customers'  balance  was  $21,492.17.  At  the  close  of  the  month 
the  cash  book  showed  receipts  from  customers  of  $25,487.50,  the  bill  book  total 
was  $5250.40  all  of  which  except  a  note  for  $500  was  received  from  customers,  the 
sales  book  total  was  $39,420.17  of  which  $5280.65  was  cash  and  $327.50  were 
proprietor's  withdrawals,  the  sales  returns  and  allowances  journal  totaled 
$1219.75.  Set  UP  the  general  ledger  Accounts  Receivable  account  and  show  all 
postings  to  it. 


67  1 


LIV 
PROBLEM    i 

On  July  i,  1910  a  trader's  stock  of  goods  was  destroyed  by  fire  but  he  saved  his 
books  of  record.  His  goods  were  fully  insured  and  he  proved  his  loss  from  the 
following  facts:  value  of  goods  on  hand  Jan.  i,  1910,  $21,500;  purchases  from 
Jan.  I,  1910  to  July  I,  1910,  $54,300;  sales  from  Jan.  I  to  July  i,  $63,750.  His 
records  for  the  past  three  years  showed  an  average  gross  profit  of  20%  on  sales. 
Find  the  value  of  the  stock  destroyed  by  fire. 

PROBLEM   2 

On  Dec.  4  you  received  a  consignment  of  goods  for  sale  on  account  of  Jas. 
Scoville  &  Co.  showing  an  invoice  value  of  $2150.  You  paid  freight  and  cartage 
of  $50.25.  Sales  were  made  on  Dec.  10,  $750  and  Dec.  21,  $1025.75  on  a  5%  com- 
mission basis.  On  Dec.  31,  upon  closing  your  books,  you  inventory  the  balance 
of  the  unsold  consigned  goods  at  $537.50.  Show  your  treatment  of  the  above, 
when  closing. 


f  681 


LV 
PROBLEM 

The  Carney-Edmunds  Co.  general  ledger  shows  the  following  trial  balance  for 
the  fiscal  year  ending  December  31,  1910: 

Land $  10,000 

Buildings 9,000 

Office  Furniture  &  Fixtures 500 

Store  Furniture  &  Fixtures 2,200 

Delivery  Equipment 2,000 

Inventory  Department  A 4,000 

Inventory  Department  B 5,ooo 

Department  A,  Purchases 20,000 

Department  A,  Purchase  Returns  &  Allowances $     1,000 

Department  B,  Purchases 28,000 

Department  B,  Purchase  Returns  &  Allowances 2,000 

Department  A,  Sales 25,100 

Department  A,  Sales  Returns  &  Allowances 800 

Department  B,  Sales 38,000 

Department  B,  Sales  Returns  &  Allowances 1,700 

Taxes 840 

Insurance 500 

Office  Expense 450 

General  Expense 200 

In-Freight • 500 

Out-Freight 100 

Horse- keep 400 

Sales  Discount 300 

Purchase  Discount 890 

Interest  &  Discount 125 

Collection  &  Exchange 25 

Printing  &  Stationery 100 

Advertising 1,500 

Travelling  Expense 750 

Salesmen's  Salaries , 5,ooo 

General  Salaries 6,000 

Capital  Stock 50,000 

Surplus 10,000 

Trade  Customers 25,000 

Trade  Creditors 3, 300 

N.  Y.  National  Bank 7,400 

Petty  Cash 100 

Notes  Receivable 2,800 

Notes  Payable 2,000 

Mortgage  Payable 3,ooo 


$135,290     $135,290 


Draw  up  pro  forma  balance  sheet,  trading  and  profit  and  loss  statements, 
taking  account  of  the  following  adjustments  and  inventories: 
Allow:     2%  depreciation  on  buildings 

10%  depreciation  on  store  and  office  furniture 
depreciation  on  delivery  equipment 

of  Trade  Customers  and  Notes  Receivable  for  bad  debts. 
Defer  $125  insurance  and  $200  advertising 
Salesmen's  salaries  $75,  interest  on  mortgage  and  notes  payable  $120,  and  bill 

for  repairs  to  building  $62.50  are  now  accrued  and  unpaid. 
Interest  earned  but  not  due  amounts  to  $23. 

Stock  of  merchandise  now  on  hand  is:  Department  A,  $6,340.20 

Department  B,     9,871.30 

Apportion  the  in-freight  to  the  two  departments  on  the  basis  of  purchases. 
Charge  90%  of  the  insurance  cost  to  Trading. 
A  10%  dividend  is  declared  and  paid. 


LVI 
PRACTICE   DATA 

Close  the  ledger,  thru  the  journal,  taking  account  of  the  following  adjustments 
and  inventories: 

Accrued  Expenses:  Sales  salaries,  $250;  general  salaries,  $342.75;  unpaid  bills 
on  buildings  repairs,  $436.20;  in-freight,  $314.75;  mortgage  interest,  $50;  interest 
on  note  held  by  Mechanics  Hardware  Co.,  $4.92,  and  one  held  by  American 
Hardware  Supply  Co.,  $10. 

Prepaid  Expenses:  Advertising,  $983.50;  insurance,  $2501.67;  general  expense, 
$129.60;  discount  on  company's  $5OOO-note,  $58.89. 

Accrued  Income:  Interest  earned  on  the  following  notes:  Salzer,  $17.36;  Colonial 
Supply,  $4.76;  Hoffman,  $3.67,  and  Mishkin,  $2.38.    Take  account  of  depreciation 
at  yearly  rates  of: 
2%  on  Buildings 

15%  on  Delivery  Equipment 

10%  on  all  Furniture  &  Fixtures 

Set  aside  2%  of  the  outstanding  accounts  and  notes  receivable  as  a  reserve  for 
doubtful  accounts. 

Inventories  on  hand  at  the  store  and  warehouses  are: 

Department  A,  $41,276.20 

Department  B,  $43,987.56 

Take  into  consideration  Department  B  goods  out  on  consignment.  Charge 
80%  of  the  insurance  cost  to  trading.  Apportion  in-freight  between  the  two  de- 
partments on  the  basis  of  purchases.  Declare  a  10%  dividend  to  be  paid  on  Dec. 
15  and  carry  the  balance  of  the  profit  and  loss  to  Surplus. 


LVII 
PRACTICE   DATA 

Draw  up  pro  forma  Balance  Sheet  and  Statement  of  Profit  &  Loss  for  the  year 
ending  Nov.  30,  19 — .    Show  the  gross  profit  on  both  kinds  of  sales. 


I  72 


LVIII 
PROBLEM 

Jackson  and  Edson  had  on  June  30,  1913  the  following  assets  and  liabilities: 
cash  $1000,  notes  receivable  $2500,  unexpired  insurance  $150,  notes  payable 
$3150,  interest  unpaid  $125,  mdse.  on  hand  $15,800,  accounts  receivable  $20,500, 
coal  $50,  office  supplies  $25,  furniture  &  fixtures  $375,  delivery  equipment  $1100, 
accounts  payable  $8225.  Of  the  net  worth  %  belonged  to  Jackson  and  %  to 
Edson.  Keeping  their  accounts  by  single  entry  and  dividing  profit  and  loss  on 
the  2  to  i  basis  referred  to  above,  they  find  their  condition  at  the  end  of  fiscal 
year  to  be:  cash  $2500,  notes  receivable  $3000  on  which  was  accrued  interest  of 
$25,  unexpired  insurance  $225,  mdse.  $12,490,  accounts  receivable  $18,175,  coal 
$140,  office  supplies  $10,  furniture  and  fixtures  $510,  delivery  equipment  $1275, 
building  $5000  on  which  was  a  mortgage  for  $3000,  notes  payable  $4250  with 
accrued  interest  of  $50,  accounts  payable  $8550,  and  salaries  unpaid  but  earned 
$150.  During  the  year  Jackson  had  made  an  additional  investment  of  $2500  and 
Edson  of  $1250;  Jackson  had  withdrawn  $7500  and  Edson  $4000. 

Determine  the  net  profit  or  loss  for  the  period  and  set  up  the  partners'  accounts 
showing  their  present  worth  at  the  close  of  the  year. 


I  731 


LIX 
PROBLEM    i 

A  note  for  $1500  dated  June  20,  1908,  bearing  interest  at  5%  had  payments 
indorsed  as  follows:  Dec.  5,  1908,  $300;  Apr.  2,  1909,  $10;  July  20,  1909,  $500; 
Dec.  31,  1909,  $400.  Find  the  amount  due  June  22,  1910.  (U.  S.  Rule.) 

PROBLEM   2 

In  a  manufacturing  concern  the  total  value  of  buildings  and  euqipment  subject 
to  insurance  was  $155,000  distributed  as  follows:  Department  I,  $25,000;  Depart- 
ment 2,  $45,000;  Department  3,  $35,000;  Department  4,  $10,000;  Power  House, 
$40,000.  The  annual  insurance  premium  amounted  to  $3105.  The  rates  on 
Departments  I,  2  and  3  were  the  same;  on  Department  4  the  rate  was  double 
that  on  Department  I  and  on  the  power  house  2^  times  that  on  Department  I. 
Find  the  amount  of  insurance  burden  chargeable  to  each  department  and  the 
power  house. 


74] 


LX 


PROBLEM 

Equate  the  following  account  and  find  the  cash  balance  due  Aug.  I,  1907,  money 
being  worth  4  3^%: 

F.  T.  Frederick 


1907 

1907 

May 

4- 

Mdse. 

60 

da. 

$1360.00 

May 

14. 

Cash 

$360.00 

May 

14. 

Mdse. 

30 

da. 

720.00 

Returnee 

mdse. 

150.00 

May 

26. 

Mdse. 

60 

da. 

1080.00 

June 

10. 

Cash 

800.00 

June 

21. 

Note, 

20 

da. 

750.00 

[  75 


LAST  DATE 


OVERDUE. 


HF 


THE  UNIVERSITY  OF  CALIFORNIA  LIBRARY 


